Judicial Precedent
Landmark Case Laws
Leading judgments set out in full — the facts, how the matter reached the court, the arguments on both sides, the reasoning, and the principles established. Every case is mapped from the Income Tax Act 1961 provision it was decided under to the corresponding section of the Income Tax Act 2025, with a note on how far the principle still holds under the new Act.
Judgments covered
Subject areas
Courts represented
Showing 112 of 112 judgments
PCIT v. Jupiter Capital Pvt Ltd
(2025) 302 Taxman 3 (SC)
Held: Yes. Reduction of capital extinguishes the shareholder's rights in the shares cancelled, and that extinguishment is a transfer. The resulting loss is a capital loss available for set off.
Hyatt International Southwest Asia Ltd v. ADIT
Supreme Court (2025)
Held: Yes on both counts. Continuous and pervasive operational control exercised through the hotel premises establishes a fixed place permanent establishment, and attribution to a profitable Indian establishment does not depend on the global profitability of the enterprise.
Tiger Global International II Holdings v. Authority for Advance Rulings
(2024) 464 ITR 1 (Del)
Held: No. Grandfathering under the protocol protects investments acquired before the cut-off date and cannot be withheld by characterising the structure as designed for treaty benefit. A valid residency certificate cannot be brushed aside, and avoidance must be established through the proper statutory route.
Ayodhya Rami Reddy Alla v. PCIT
Telangana High Court (2024)
Held: Yes to the first and no to the second. A specific anti-avoidance provision does not oust the general rule; where the specific provision does not cover the arrangement, the general rule may still apply. The statutory process must run its course before the court will interfere.
SAP Labs India Pvt Ltd v. Income Tax Officer
(2023) 454 ITR 121 (SC)
Held: High Courts can and must examine whether the arm's length price was determined in accordance with the statute and the Rules. Transfer pricing appeals are not immune from scrutiny merely because they involve comparables.
Assessing Officer v. Nestle SA
(2023) 458 ITR 756 (SC)
Held: A separate notification under Section 90(1) is required. The MFN clause is not self-operational, and the third country must have been a member of the OECD at the time the treaty with India was entered into.
Blackstone Capital Partners (Singapore) VI FDI Three Pte Ltd v. ACIT
(2023) 452 ITR 111 (Del)
Held: No. A validly issued residency certificate is sufficient evidence of residence, beneficial ownership and legal ownership for treaty purposes, and reassessment cannot be founded on looking behind it.
PCIT v. Abhisar Buildwell Pvt Ltd
(2023) 454 ITR 212 (SC)
Held: No. For completed or unabated assessments, additions must rest on incriminating material found in the search. The Revenue's remedy in such cases is to reopen under the reassessment provisions, if otherwise available.
ACIT (Exemptions) v. Ahmedabad Urban Development Authority
(2022) 449 ITR 1 (SC)
Held: A GPU charity may charge fees and generate surplus, but only where the activity is undertaken in the actual course of advancing its object and the receipts stay within the statutory quantitative ceiling. Charging a markedly higher-than-cost price indicates business.
New Noble Educational Society v. Chief CIT
(2022) 448 ITR 594 (SC)
Held: 'Solely' means exclusively. An institution with objects extending beyond education does not qualify, even if education is its predominant activity. Compliance with applicable state and regulatory law is also relevant to approval.
Checkmate Services Pvt Ltd v. CIT
(2022) 448 ITR 518 (SC)
Held: No. Employees' contributions are held in trust by the employer and must be deposited by the due date under the governing welfare legislation. The relaxation for payments made before the return due date applies only to the employer's own contributions.
Union of India v. Ashish Agarwal
(2022) 444 ITR 1 (SC)
Held: Rather than quash them, the notices are deemed to be notices under the new inquiry provision. The Revenue must supply the underlying material and follow the new procedure, and the taxpayer's objections are preserved.
PCIT v. Mahagun Realtors Pvt Ltd
(2022) 443 ITR 194 (SC)
Held: No. The invalidity rule is not absolute. Where the amalgamation was concealed, returns were filed in the old name and the conduct of the assessee contributed to the error, the assessment is not void.
CIT v. Mansukh Dyeing and Printing Mills
(2022) 449 ITR 439 (SC)
Held: Yes. Crediting the revaluation surplus to partners' capital accounts, which they are then entitled to draw, amounts to a distribution of assets and attracts the charge — even though no asset physically leaves the firm.
Engineering Analysis Centre of Excellence Pvt Ltd v. CIT
(2021) 432 ITR 471 (SC)
Held: No. What is transferred is a copyrighted article, not a right in the copyright. Such payments are business profits, not royalty, under the relevant treaties, and no tax need be withheld where the non-resident has no permanent establishment in India.
South Indian Bank Ltd v. CIT
(2021) 438 ITR 1 (SC)
Held: No. A presumption arises that the investments were made out of the taxpayer's own funds where those funds exceed the investments, and proportionate disallowance of interest is not warranted.
Union of India v. UAE Exchange Centre
(2020) 425 ITR 30 (SC)
Held: No. The activity was preparatory or auxiliary in character and fell within the exclusion in the treaty. No part of the business profits was therefore taxable in India.
DIT v. Samsung Heavy Industries Co Ltd
(2020) 426 ITR 1 (SC)
Held: No. The burden is on the Revenue to show that the office carried on the core business rather than acting as a communication channel. Attribution must reflect the functions actually performed in India.
Shree Choudhary Transport Co v. ITO
(2020) 426 ITR 289 (SC)
Held: It applies to both. The provision covers sums on which tax was deductible and was not deducted, whether or not they remain outstanding at the close of the year.
New Delhi Television Ltd v. DCIT
(2020) 424 ITR 607 (SC)
Held: No. The taxpayer must be told the provision and the basis on which the extended period is invoked. A notice cannot be sustained on a ground never put to the taxpayer, though on the facts the reopening survived within the ordinary period.
PCIT v. Maruti Suzuki India Ltd
(2019) 416 ITR 613 (SC)
Held: No. An assessment on a non-existent entity is a jurisdictional defect that goes to the root of the matter. It is void, and cannot be cured as a mere procedural irregularity.
PCIT v. NRA Iron & Steel Pvt Ltd
(2019) 412 ITR 161 (SC)
Held: Identity alone is not enough. The company must establish the identity of the investors, their creditworthiness, and the genuineness of the transaction. Where investors are non-existent or lack means, the credits may be assessed as the company's income.
PCIT v. Kusum Health Care Pvt Ltd
(2018) 99 taxmann.com 431 (Del)
Held: No. Where the working capital position is already factored into the margins of the tested party, a further adjustment for outstanding receivables amounts to double counting.
ADIT v. E-Funds IT Solution Inc
(2018) 399 ITR 34 (SC)
Held: No. A permanent establishment requires a fixed place at the foreign enterprise's disposal through which it carries on its own business. Close commercial dependence between group companies does not by itself create one.
Maxopp Investment Ltd v. CIT
(2018) 402 ITR 640 (SC)
Held: No. The dominant purpose of holding the shares is irrelevant. Once exempt dividend income is in fact earned, expenditure relatable to it must be disallowed. The disallowance must, however, be computed on a proper basis with recorded satisfaction.
CIT v. Rajasthan & Gujarati Charitable Foundation
(2018) 402 ITR 441 (SC)
Held: Yes, on the law as it stood. Claiming the acquisition cost as application and claiming depreciation are not double deduction: the first determines whether income was applied in the year of acquisition, the second is a step in computing income in later years.
CIT v. Balbir Singh Maini
(2017) 398 ITR 531 (SC)
Held: No. After the 2001 amendment to the Registration Act, an unregistered agreement has no effect in law for the purposes of Section 53A of the Transfer of Property Act. There is therefore no transfer, and no capital gain arises.
Formula One World Championship Ltd v. CIT
(2017) 394 ITR 80 (SC)
Held: Yes. The circuit was at the company's disposal and its commercially significant activity was carried on through it. A permanent establishment does not require a long or continuous presence where the activity is by nature short and recurring.
Godrej & Boyce Manufacturing Co Ltd v. DCIT
(2017) 394 ITR 449 (SC)
Held: The disallowance applies, because the dividend is exempt in the shareholder's hands whatever tax the company has paid. The prescribed method operates prospectively, and before it the Assessing Officer must determine the disallowance on a reasonable basis.
DIT v. A.P. Moller Maersk A/S
(2017) 392 ITR 186 (SC)
Held: No. A pro-rata recovery of the actual cost of a shared facility, without any mark-up or profit element, is a reimbursement and not income. It is neither royalty nor a fee for technical services.
Maruti Suzuki India Ltd v. CIT
(2016) 381 ITR 117 (Del)
Held: No. The existence of an international transaction must be established as a fact before any pricing exercise begins. It cannot be inferred merely because the Indian entity's marketing expenditure is high.
ITC Ltd v. CIT (TDS)
(2016) 384 ITR 14 (SC)
Held: No. Tips are payments voluntarily made by customers, not by the employer, and do not arise from the contract of employment. They are not salary, so the withholding obligation on salary is not attracted. The employer acts only as a conduit.
DIT v. New Skies Satellite BV
(2016) 382 ITR 114 (Del)
Held: No. A treaty is a bilateral instrument and its terms cannot be amended by unilateral domestic legislation. Where the treaty definition is narrower, it prevails regardless of a later domestic expansion.
CIT v. Amitabh Bachchan
(2016) 384 ITR 200 (SC)
Held: The Commissioner is not confined to the grounds in the notice and may consider other aspects that emerge, provided the assessee is given a reasonable opportunity of being heard on them. What is required is opportunity, not a separate notice for every ground.
Fibre Boards (P) Ltd v. CIT
(2015) 376 ITR 596 (SC)
Held: Advances paid towards the purchase of land, building and plant amount to utilisation of the capital gain. Completion of the purchase within the period is not required.
Queen's Educational Society v. CIT
(2015) 372 ITR 699 (SC)
Held: No. Where the surplus arises incidentally and is ploughed back into the educational activity, the institution does not exist for profit. Generating a surplus is not the same as having a profit motive.
Sony Ericsson Mobile Communications India Pvt Ltd v. CIT
(2015) 374 ITR 118 (Del)
Held: The bright line test has no statutory basis and cannot be used to carve out a notional international transaction. Where the distributor is adequately compensated overall, no separate adjustment for marketing spend is warranted.
CIT v. Tata Autocomp Systems Ltd
(2015) 374 ITR 516 (Bom)
Held: The rate prevailing where the loan is received and used. Benchmarking a foreign currency loan against Indian rupee lending rates is inappropriate, because the two are not comparable.
Taparia Tools Ltd v. JCIT
(2015) 372 ITR 605 (SC)
Held: No. Where the liability has been incurred and the sum actually paid in the year, the whole of it is deductible in that year. The treatment adopted in the books does not govern, and there is no concept of deferred revenue expenditure in the Act absent a specific provision.
CIT v. Japan Airlines Co Ltd
(2015) 377 ITR 372 (SC)
Held: They are rent. The definition of rent in the withholding provision is very wide and covers any payment for the use of land, whatever the arrangement is called and whether or not the payee owns the property.
CIT v. Cotton Naturals (I) Pvt Ltd
(2015) 276 CTR 445 (Del)
Held: The currency in which the loan is denominated and repayable. The interest rate applicable to that currency in the borrower's market governs, and the lender's domestic rates are irrelevant.
CIT v. India Advantage Fund-VII
Karnataka High Court (2015)
Held: Yes. Where the contributors and their proportionate interests can be ascertained, the trust is determinate. Income is assessable in the contributors' hands and the fund is not chargeable at the maximum marginal rate.
Sanjeev Lal v. CIT
(2014) 365 ITR 389 (SC)
Held: The agreement to sell itself created a right in favour of the buyer and extinguished a corresponding right of the seller. That date can be treated as the date of transfer for applying the Section 54 time limit.
CIT v. Dawoodi Bohara Jamat
(2014) 364 ITR 31 (SC)
Held: No. A composite religious and charitable trust is entitled to registration. The restriction concerning benefit to a particular community goes to the allowance of exemption at assessment, not to the grant of registration.
Vodafone India Services Pvt Ltd v. Union of India
(2014) 368 ITR 1 (Bom)
Held: No. The issue of shares at a premium is a capital account transaction that gives rise to no income. Transfer pricing provisions are machinery for computing income and cannot create income where none arises.
Li & Fung India Pvt Ltd v. CIT
(2014) 361 ITR 85 (Del)
Held: No. The mark-up must be applied to the taxpayer's own cost base. Costs not incurred by the taxpayer, and risks it does not assume, cannot be brought into the computation.
Union of India v. Tata Chemicals Ltd
(2014) 363 ITR 658 (SC)
Held: Yes. The State, having received and retained money without right, must refund it with interest. Interest under Section 244A is payable to the deductor from the date the tax was paid to the date of refund.
CIT v. Cushman and Wakefield (India) Pvt Ltd
(2014) 367 ITR 730 (Del)
Held: No to both. The officer's role is to price the transaction, not to decide whether the expenditure should be allowed. Deductibility is for the Assessing Officer to determine separately under the ordinary provisions.
CIT v. Vatika Township Pvt Ltd
(2014) 367 ITR 466 (SC)
Held: The presumption is against retrospectivity. An amendment imposing a new burden operates prospectively unless the legislature clearly provides otherwise; only a clarificatory or beneficial provision that creates no new liability may be applied to earlier periods.
DIT v. Copal Research Ltd
(2014) 371 ITR 114 (Del)
Held: Only where the Indian element is substantial. Shares must derive their value substantially from assets in India, which the Court read as requiring the Indian assets to represent at least half of the total value.
Linde AG v. DIT
(2014) 365 ITR 1 (Del)
Held: No, where the scope of work, responsibilities and remuneration of each member are separate and each bears its own risk and earns its own profit. A joint bid and joint liability to the customer do not by themselves create an association of persons.
CIT v. Excel Industries Ltd
(2013) 358 ITR 295 (SC)
Held: In the year of utilisation. Income accrues only when a right to receive it becomes vested and enforceable; until the licence is used, the benefit is contingent and no real income has arisen.
MAK Data P Ltd v. CIT
(2013) 358 ITR 593 (SC)
Held: No. A surrender made after the Revenue has confronted the taxpayer with incriminating material is not voluntary. The statutory presumption applies unless the taxpayer offers a bona fide explanation, and a plea of buying peace is not such an explanation.
Sanofi Pasteur Holding SA v. Department of Revenue
(2013) 354 ITR 316 (AP)
Held: Not taxable in India. Under the treaty, gains from the alienation of shares are taxable only in the state of residence of the transferor. A genuine holding company with real investment purpose is not a device, and retrospective domestic amendments cannot override a treaty.
Vodafone International Holdings BV v. Union of India
(2012) 341 ITR 1 (SC)
Held: On the law as it then stood, no. The transaction was a bona fide offshore transfer of a foreign company's shares, and the Indian authorities had no jurisdiction to tax it.
CIT v. EKL Appliances Ltd
(2012) 345 ITR 241 (Del)
Held: No. The officer's mandate is to determine the price of the transaction, not to sit in judgment on whether the taxpayer should have entered into it. Commercial expediency is for the businessman to decide.
Price Waterhouse Coopers Pvt Ltd v. CIT
(2012) 348 ITR 306 (SC)
Held: No. Where the error is inadvertent and the correct position is apparent from the audited accounts and the tax audit report filed with the return, the mistake is bona fide and penalty is not warranted.
CIT v. Bharti Cellular Ltd
(2011) 330 ITR 239 (SC)
Held: Technical services connote a human element. Where a facility operates automatically without human intervention, the payment is for the use of a facility rather than for technical services — but the question requires expert evidence on the facts.
GVK Industries Ltd v. ITO
(2011) 332 ITR 130 (SC)
Held: Parliament may legislate in respect of extra-territorial acts provided there is a real connection with India. A success fee for advisory services used in an Indian project has such a connection and is taxable as fees for technical services.
GE India Technology Centre Pvt Ltd v. CIT
(2010) 327 ITR 456 (SC)
Held: Only where the sum is chargeable to tax. The obligation to withhold arises on 'any sum chargeable under the provisions of this Act', and the words cannot be read out of the section.
CIT v. Kelvinator of India Ltd
(2010) 320 ITR 561 (SC)
Held: No. Reopening requires tangible material indicating escapement of income. A mere change of opinion confers no power to reassess, which would amount to a power of review the statute does not grant.
CIT v. Reliance Petroproducts Pvt Ltd
(2010) 322 ITR 158 (SC)
Held: No. A claim that is not sustainable in law does not amount to furnishing inaccurate particulars. Penalty requires the particulars supplied to be inaccurate — a wrong claim, fully disclosed, is not the same thing.
CIT v. Walfort Share and Stock Brokers P Ltd
(2010) 326 ITR 1 (SC)
Held: No. The loss was real and arose on an actual transaction. The disallowance for expenditure relating to exempt income does not reach a loss on sale, and the court will not supply an anti-avoidance provision the legislature has not enacted.
CIT v. Woodward Governor India (P) Ltd
(2009) 312 ITR 254 (SC)
Held: Deductible, where the liability is on revenue account. Under the mercantile system a loss arising from restating a revenue liability at the closing rate is an accrued liability, not a contingent one, and realisation is not a precondition.
Rotork Controls India (P) Ltd v. CIT
(2009) 314 ITR 62 (SC)
Held: Allowable, where it is based on a reliable estimate grounded in historical experience. A warranty provision meets the recognition tests for a liability; a provision made on an ad hoc or arbitrary basis does not.
CIT v. Alom Extrusions Ltd
(2009) 319 ITR 306 (SC)
Held: Yes to both. The employer's contribution is deductible if paid by the return due date, and the amendment deleting the restrictive proviso is curative and applies retrospectively.
CIT v. Eli Lilly & Co (India) P Ltd
(2009) 312 ITR 225 (SC)
Held: Yes, where the payment abroad is for services rendered in India. The withholding obligation attaches to the salary as a whole, not merely to the component routed through the Indian payroll.
American Hotel & Lodging Association Educational Institute v. CBDT
(2008) 301 ITR 86 (SC)
Held: At the threshold the authority examines the objects and the genuineness of the institution. Application of income is a matter for monitoring afterwards through the statutory conditions, not a ground for refusing approval at the outset.
Union of India v. Dharamendra Textile Processors
(2008) 306 ITR 277 (SC)
Held: The liability is civil. Penalty is a statutory consequence of the conditions in the provision being met, and mens rea in the criminal sense need not be established.
S.A. Builders Ltd v. CIT (Appeals)
(2007) 288 ITR 1 (SC)
Held: Yes, if the advance was made as a measure of commercial expediency. The test is whether the funds were advanced for the assessee's own business purposes, not whether the assessee earned a direct return.
Hindustan Coca Cola Beverage (P) Ltd v. CIT
(2007) 293 ITR 226 (SC)
Held: No. Once the recipient has discharged the tax on the income, the same tax cannot be collected a second time from the deductor. The deductor remains liable for interest for the period of default and for any penalty.
Ishikawajima-Harima Heavy Industries Ltd v. DIT
(2007) 288 ITR 408 (SC)
Held: No. Territorial nexus is essential. Offshore supply where title passes outside India, and services rendered wholly outside India, are not chargeable merely because the project is located in India or the payment is made by an Indian party.
DIT v. Morgan Stanley & Co Inc
(2007) 292 ITR 416 (SC)
Held: Outsourcing to a captive performing support functions does not create a fixed place or agency permanent establishment, though deputation of the parent's employees can create a service permanent establishment. Where the captive is remunerated at arm's length, nothing further is attributable.
CIT v. Hyundai Heavy Industries Co Ltd
(2007) 291 ITR 482 (SC)
Held: No. A permanent establishment cannot be attributed profits from activities completed before it came into existence. Only the income arising from the Indian installation activity is taxable, computed as though the permanent establishment were a distinct enterprise.
ACIT v. Rajesh Jhaveri Stock Brokers (P) Ltd
(2007) 291 ITR 500 (SC)
Held: No. An intimation on summary processing is not an assessment and involves no formation of opinion, so there is no opinion capable of being changed. Reopening remains subject to the reason to believe requirement.
CIT v. Gujarat Maritime Board
(2007) 295 ITR 561 (SC)
Held: Yes. Developing and managing ports for the benefit of trade and the public is an object of general public utility, and a body whose income is statutorily committed to those purposes and cannot be distributed qualifies.
CIT v. Ace Builders (P) Ltd
(2006) 281 ITR 210 (Bom)
Held: Yes. Section 50 creates a deeming fiction only for the purpose of computation. It does not convert a long-term asset into a short-term one for every purpose of the Act, so the exemption remains available.
CIT v. D.P. Sandu Bros Chembur (P) Ltd
(2005) 273 ITR 1 (SC)
Held: A tenancy right is a capital asset, so the consideration falls to be dealt with under the capital gains provisions. If it is not chargeable there, it cannot be assessed under the residuary head instead.
Tata Consultancy Services v. State of Andhra Pradesh
(2005) 271 ITR 401 (SC)
Held: Canned software sold off the shelf is goods. Once a programme is put on a medium and marketed, it becomes a marketable commodity capable of being bought, sold, transmitted and stored, notwithstanding that copyright subsists in the underlying programme.
Chaturbhuj Dwarkadas Kapadia v. CIT
(2003) 260 ITR 491 (Bom)
Held: Transfer occurs in the year in which the developer becomes willing to perform its part of the contract and possession is handed over in part performance, even if the conveyance is executed later.
Union of India v. Azadi Bachao Andolan
(2003) 263 ITR 706 (SC)
Held: The certificate is to be accepted as evidence of residence for treaty purposes. Treaty shopping is not by itself unlawful, and a treaty benefit cannot be denied merely because the structure was chosen for its tax advantages.
GKN Driveshafts (India) Ltd v. ITO
(2003) 259 ITR 19 (SC)
Held: On receiving a notice the taxpayer may seek the reasons recorded, which the officer is bound to furnish. The taxpayer may then file objections, and the officer must dispose of them by a speaking order before proceeding with the reassessment.
CIT v. Thanthi Trust
(2001) 247 ITR 785 (SC)
Held: Yes. Where the business is held under trust, or is incidental to attaining the trust's objectives, and separate books are maintained, the income is eligible for exemption provided it is applied to the charitable purpose.
CIT v. Programme for Community Organisation
(2001) 248 ITR 1 (SC)
Held: On gross receipts. The trust is entitled to accumulate the statutory percentage of the total income derived from property held under trust, not of the balance left over.
CIT v. Grace Collis
(2001) 248 ITR 323 (SC)
Held: Extinguishment is an independent limb. Rights in a capital asset may be extinguished without any corresponding transfer to another person, and such extinguishment is itself a transfer for capital gains purposes.
Bharat Earth Movers v. CIT
(2000) 245 ITR 428 (SC)
Held: Yes. A liability that has definitely arisen in the year is deductible even though it will be discharged in future and its quantification requires estimation. Only a contingent liability is excluded.
Malabar Industrial Co Ltd v. CIT
(2000) 243 ITR 83 (SC)
Held: Both conditions must be satisfied cumulatively. The order must be erroneous and prejudicial to the interests of the Revenue. Where the officer has taken one of two views permissible in law, the order is not erroneous merely because the Commissioner prefers the other.
Transmission Corporation of AP Ltd v. CIT
(1999) 239 ITR 587 (SC)
Held: Withholding attaches to the sum chargeable, and where a payment is composite the payer must apply to the Assessing Officer for a determination of the appropriate proportion rather than deciding unilaterally.
Tata Iron & Steel Co Ltd v. CIT
(1998) 231 ITR 285 (SC)
Held: No. The cost of an asset and the manner in which the purchase price is raised and repaid are two distinct matters. Fluctuation in the exchange rate on repaying the loan does not alter the actual cost of the asset.
Madras Industrial Investment Corporation Ltd v. CIT
(1997) 225 ITR 802 (SC)
Held: It must be spread. The discount is the price of obtaining the use of money over the debenture's term, so the liability is to be allocated over that period rather than deducted entirely in the year of issue.
ITO v. Ch. Atchaiah
(1996) 218 ITR 239 (SC)
Held: No. Under the 1961 Act the Assessing Officer must tax the right person, and only the right person. The option that existed under the 1922 Act was deliberately removed, so an assessment on the wrong person is not saved by the availability of an alternative.
Sumati Dayal v. CIT
(1995) 214 ITR 801 (SC)
Held: Yes. The taxing authorities are entitled to look at the surrounding circumstances and apply the test of human probabilities, and are not obliged to accept an explanation merely because it is supported by documents.
CIT v. Kamalini Khatau
(1994) 209 ITR 101 (SC)
Held: The Revenue may assess either. Where income of a discretionary trust has in fact been distributed to a beneficiary, it may be assessed in that beneficiary's hands, and the provision charging the trustee does not confer immunity on the recipient.
Radhasoami Satsang v. CIT
(1992) 193 ITR 321 (SC)
Held: Ordinarily not. Although each assessment year is a separate unit and res judicata does not strictly apply, a fundamental aspect permeating different years that has been accepted should not be changed absent a material alteration in facts or law.
Vania Silk Mills (P) Ltd v. CIT
(1991) 191 ITR 647 (SC)
Held: No, on the law as it then stood. Destruction of an asset is not a transfer; the asset ceases to exist rather than passing to anyone, and insurance money is paid under the policy rather than as consideration for a transfer.
Marsons Beneficiary Trust v. CIT
(1990) 188 ITR 224 (Bom)
Held: A trust is determinate where the beneficiaries and their shares are capable of being ascertained from the trust deed at the date it takes effect. It is not necessary that they be named, nor that the shares be quantified in money terms.
Sunil Siddharthbhai v. CIT
(1985) 156 ITR 509 (SC)
Held: A transfer does occur, but on the law as it then stood the consideration was not ascertainable — the credit to the capital account is a notional figure whose real worth depends on future events — so no computable gain arose.
McDowell & Co Ltd v. Commercial Tax Officer
(1985) 154 ITR 148 (SC)
Held: Legitimate tax planning within the law is permissible, but colourable devices and dubious methods adopted to avoid tax are not. The substance of an arrangement may be examined rather than accepting its form.
CIT v. B.C. Srinivasa Setty
(1981) 128 ITR 294 (SC)
Held: No. The charging section and the computation provisions together form an integrated code. Where the computation provision cannot apply because no cost of acquisition is identifiable, the charge itself fails.
K.P. Varghese v. Income Tax Officer
(1981) 131 ITR 597 (SC)
Held: No. The burden lies on the Revenue to establish that the consideration was in fact understated. A provision aimed at tax evasion cannot be turned on an honest transaction merely because market value exceeds the stated price.
CIT v. Surat Art Silk Cloth Manufacturers Association
(1980) 121 ITR 1 (SC)
Held: No. Apply the predominant object test: if the dominant purpose is charitable and profit-making is merely ancillary or incidental to achieving it, the organisation remains charitable.
Empire Jute Co Ltd v. CIT
(1980) 124 ITR 1 (SC)
Held: Revenue. An enduring advantage is not decisive. Where the advantage is in the revenue-earning sphere — facilitating trading operations or enabling more efficient conduct of business without touching the fixed capital — the expenditure is revenue in nature.
CIT v. T.N. Aravinda Reddy
(1979) 120 ITR 46 (SC)
Held: Yes. 'Purchase' bears its ordinary meaning of acquiring for a price, and includes acquiring a share from co-owners. A narrow, technical construction is not warranted.
CWT v. Trustees of HEH Nizam's Family (Remainder Wealth) Trust
(1977) 108 ITR 555 (SC)
Held: In a representative capacity. The liability of the trustee is coextensive with, and no greater or less than, that of the beneficiary. The trustee is assessed in the same manner and to the same extent as the person represented.
ITO v. Lakhmani Mewal Das
(1976) 103 ITR 437 (SC)
Held: There must be a live link or close nexus between the material and the formation of belief. The belief must be that of a reasonable person acting on relevant grounds, and cannot rest on vague, remote or irrelevant material.
Sole Trustee, Loka Shikshana Trust v. CIT
(1975) 101 ITR 234 (SC)
Held: 'Education' means systematic instruction, schooling or training — the process of training and developing knowledge and skill by normal schooling. It does not extend to every activity that spreads knowledge.
CIT v. Durga Prasad More
(1971) 82 ITR 540 (SC)
Held: No. Though an apparent state of affairs is to be treated as real unless shown otherwise, the onus of showing that the apparent is not the real lies on the party asserting it, and the authorities may test the story against ordinary human conduct.
CIT v. George Henderson & Co Ltd
(1967) 66 ITR 622 (SC)
Held: The consideration actually agreed. 'Full value of the consideration' means the whole price received or receivable for the transfer, and is not the same thing as the fair market value of the asset.
Miss Dhun Dadabhoy Kapadia v. CIT
(1967) 63 ITR 651 (SC)
Held: Yes. The rights entitlement comes into existence at the cost of a depreciation in the value of the original holding, and that diminution is the real cost the shareholder incurred to acquire it.
CIT v. Andhra Chamber of Commerce
(1965) 55 ITR 722 (SC)
Held: Yes. Promoting and protecting trade and industry serves the public interest. That members derive an incidental benefit does not deprive the object of its public character.
CIT v. Malayalam Plantations Ltd
(1964) 53 ITR 140 (SC)
Held: It is wider. The expression covers not merely the earning of profits but the many acts incidental to carrying on a business, including protecting and preserving it, provided the expenditure is not of a personal or capital character.
Calcutta Discount Co Ltd v. ITO
(1961) 41 ITR 191 (SC)
Held: The duty is to disclose fully and truly all primary facts. Drawing inferences from those facts is the officer's function, and a failure by him to draw the correct inference does not constitute a failure to disclose by the taxpayer.