Supreme Court Refuses To Entertain Plea For Creamy Layer In Income-Tax Exemption For Scheduled Tribes In North-East States

The Supreme Court on Tuesday declined to entertain a plea seeking the introduction of a "creamy layer" mechanism for the income-tax exemption granted to Scheduled Tribes residing in specified areas and States under the Income Tax Act, 2025.The petitioner sought a direction to restrict the benefit to economically weaker tribals and exclude affluent beneficiaries. A bench of CJI Surya Kant and Justice V. Mohana allowed petitioner Ashwini Upadhyay to withdraw the petition with the ...

Cash Held By Chartered Accountant For Client Tax Payments Not Unexplained Income: ITAT Chennai

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 11 June held that a practising Chartered Accountant does not incur liability under Section 69A of the Income Tax Act merely because clients deposit cash into his bank account for payment of statutory dues, where the evidence shows he used the funds to remit taxes on their behalf. Judicial Member Aby T. Varkey and Accountant Member Padmavathy S allowed the appeal filed by Bose Saravanan and directed the Assessing Officer to delete...

Revenue Must Disclose Tally Data, Forensic Report Before Making Additions: ITAT Kolkata

On 16 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that the Revenue cannot rely on tally data and a forensic analysis report without confronting a taxpayer with those materials, as doing so constitutes a “grave violation of natural justice”. Accountant Member Rajesh Kumar and Judicial Member Pradip Kumar Choubey partly allowed Kailash Kumar Patwari's appeals for statistical purposes, dismissed the Revenue's appeals, and remanded the matter to the Assessing Officer....

Excess Royalty Refunded To Indian Subsidiary Under APA Cannot Be Taxed As Income Of GIA US: Bombay High Court

The Bombay High Court has upheld relief granted to Gemological Institute of America Inc. (GIA US) in a dispute over royalty payments received from its Indian subsidiary. The court ruled that royalty amounts bona fide refunded pursuant to a CBDT-approved Advance Pricing Agreement (APA) could not be brought to tax in the hands of the US entity because the amounts did not ultimately belong to it. A Division Bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla dismissed a batch of...

Gujarat HC Quashes Reassessment, Holds No Escaped Income Exists Where MAT Liability Is Unchanged

The Gujarat High Court has quashed reassessment proceedings initiated against Pandesara Infrastructure Limited for Assessment Year 2020-21. The court found that the proposed recomputation of depreciation would not result in any income chargeable to tax escaping assessment. It also noted that the company's liability under the Minimum Alternate Tax (MAT) regime would remain unchanged. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati allowed the writ petition challenging...

ITAT Mumbai Quashes Reassessment In Nanne Gulzar Case, Holds Section 153C Mandatory In Search Matters

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held on 15 June that the Revenue must assess additions arising from search material only under Section 153C of the Income Tax Act and cannot invoke the reassessment provisions under Sections 147/148. Vice President Saktijit Dey and Accountant Member Prabhash Shankar allowed the appeals filed by Nanne Gulzar & Company and set aside the reassessment proceedings initiated by the Department. The Bench held: “As per the scheme and...

ITAT Mumbai Allows Deduction Of ₹80 Crore Paid By Mumbai Port Authority To SBI Life For Leave Encashment

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that Mumbai Port Authority's ₹80 crore contribution to SBI Life Insurance Co. Ltd. under a leave encashment scheme is deductible, finding that the payment represented an actual outflow of funds rather than a mere provision for a future liability. A Bench of Judicial Member Anikesh Banerjee and Accountant Member Makarand Vasant Mahadeokar observed: “The amount of Rs.80,00,00,000/- stands actually paid to SBI Life Insurance...

Madras High Court Issues Notice On Plea Challenging Retrospective Amendments To Income Tax Act, 1961

The Madras High Court on Monday issued notice on a plea challenging several retrospective amendments to the Income-tax Act, 1961 introduced through the Finance Act, 2026, which are alleged to be unconstitutional and to impermissibly overturn judicial interpretations of tax provisions. A Division Bench of Chief Justice S.A. Dharmadhikari and Justice Arul Murugan issued notice on the petition and is likely to hear the matter next on July 21. The plea was filed by the Revenue Bar Association, a...

ITAT Delhi Deletes ₹5.60 Crore Demonetisation Addition, Says Recorded Business Receipts Not Unexplained

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted a ₹5.60 crore addition made against a Delhi jeweller over cash deposits during the demonetisation period. The bench found that the source of the deposits was recorded in the taxpayer's audited books of account and that the related business income had already been assessed. The bench comprising Vice President Mahavir Singh and Accountant Member S. Rifaur Rahman allowed the appeal filed by Rakesh Kumar, proprietor of R.V....

Following Earlier Rulings, ITAT Mumbai Allows DSIR-Unapproved R&D Expenditure As Business Deduction

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed Manugraph India Limited to claim ₹22 lakh in research and development (R&D) expenditure as a business deduction. The amount had not been approved by the Department of Scientific and Industrial Research (DSIR) for weighted deduction. The tribunal followed earlier decisions that permitted such claims under the Income Tax Act. A bench of Judicial Member Pawan Singh and Accountant Member Makarand Vasant Mahadeokar noted...

SBI Not In Default For Not Deducting Tax On Leave Travel Claims Under HC Directions: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal on Friday held that the State Bank of India could not be treated as an assessee in default for failing to deduct tax at source on Leave Fare Concession payments made to employees. The tribunal found that the bank had acted in accordance with binding interim directions of the Madras High Court. A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary allowed four appeals filed by different SBI branches. The...

CCDs Cannot Be Treated As Equity For Disallowing Interest: ITAT Mumbai Deletes ₹76.45 Crore TP Addition

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted a transfer pricing adjustment of ₹76.45 crore made on interest paid by EBIXCASH World Money Limited on compulsorily convertible debentures (CCDs). The tribunal held that precedents consistently recognise CCDs as debt instruments and that interest paid on them cannot be disallowed by treating them as equity. “We find that the grounds of appeal raised by assessee is in fact covered by a series of decisions of Tribunal and...