In a landmark Special Bench decision, the ITAT Delhi ruled that disallowance under section 14A of the Income Tax Act applies even when no exempt income is actually earned during the assessment year. The Court emphasized that the statutory language ‘income which does not form part of total income’ refers to the character of income rather than its actual receipt. This interpretation prevents taxpayers from claiming deductions for expenses related to investments intended to generate exempt income, even if those investments don’t yield returns in a particular year. The decision clarifies that the timing of exempt income receipt is irrelevant for section 14A application – what matters is whether expenses were incurred in relation to activities aimed at generating exempt income.

In a landmark ruling favoring the assessee, the Gauhati High Court held that surtax paid under the Companies (Profits) Surtax Act 1964 is deductible as business expenditure under Section 37 of the Income Tax Act 1961. The Court distinguished surtax from income-tax, noting it is levied under a separate statute and not covered by the prohibition in Section 40(a)(ii). The decision underscores that statutory levies paid for business operations, unless explicitly barred, qualify as deductible expenses. This judgment diverges from several High Courts but aligns with the dissenting view in Kerala’s Full Bench, providing relief to companies by reducing taxable income through surtax deductions.

In this landmark ruling by the Income Tax Appellate Tribunal, Kolkata Bench, the Tribunal overturned the lower authorities’ decision to deny exemption on Long Term Capital Gains (LTCG) from share sales. The assessee, Kaushalya Agarwal, demonstrated genuine transactions through documented purchase, dematerialization, and sale via stock exchanges, with payments through banking channels. The Tribunal criticized the Assessing Officer’s reliance on generic investigation reports and unsubstantiated allegations, reaffirming that the burden shifts to the Revenue to prove bogus claims with specific evidence. This decision underscores the importance of evidence-based assessments and protects taxpayers from arbitrary additions based on mere suspicion, setting a precedent for similar cases involving LTCG claims.

In Ethio Plastics Pvt. Ltd. vs. DCIT, the ITAT Ahmedabad ruled that disallowance under Section 14A read with Rule 8D is not applicable to dividend income earned from shares held as stock-in-trade. The assessee, a dealer in shares/securities, argued that dividend income was incidental to its trading business. The Tribunal agreed, holding that Section 14A targets expenses related to exempt income from investments, not stock-in-trade. This decision clarifies the scope of Section 14A, emphasizing the business context over mechanical application of Rule 8D.

In this landmark reassessment validity case, the Kolkata ITAT ruled decisively that Income Tax authorities cannot initiate reassessment proceedings under section 148 against companies that have ceased to exist due to amalgamation. The Tribunal established that such notices suffer from fundamental jurisdictional defects that cannot be cured by section 292B’s procedural saving provision. This judgment reinforces the principle that legal existence of the assessee is a precondition for valid tax proceedings and provides crucial protection for successor companies in merger and acquisition scenarios.

This ITAT Hyderabad decision clarifies the Commissioner’s revisional jurisdiction under section 263 over assessment orders by an Inspecting Assistant Commissioner, specifically regarding mandatory interest under section 215 for non-payment of advance tax. The Tribunal ruled that non-levy of such interest, without a recorded waiver under rule 40, constitutes an error prejudicial to revenue, allowing revision. The judgment reinforces that waiver of interest requires explicit, reasoned orders, and mere omission does not suffice, aligning with prevailing judicial consensus.

In this landmark judgment, the Madras High Court decisively upheld the taxpayer’s entitlement to deduction under Section 80IA(4) of the Income Tax Act for developing critical sewerage infrastructure, reinforcing the distinction between a ‘developer’ and a ‘contractor’ based on substantive investment, risk-bearing, and end-to-end project execution. The Court also validated the treatment of foreign exchange loss as allowable business expenditure under Section 37(1), emphasizing its revenue nature. This ruling provides crucial clarity for infrastructure enterprises on eligibility criteria for tax incentives and bolsters the principle that factual determinations by lower authorities are binding unless perverse.

In this landmark transfer pricing ruling, the Chennai ITAT firmly upheld the assessee’s position, delivering a decisive victory for SRA Systems Ltd. The Tribunal meticulously dismantled the Revenue’s ALP adjustments, condemning the TPO’s arbitrary rejection of comparables as unreasoned and inconsistent with established transfer pricing norms. Key holdings: (1) TPOs must provide cogent reasons for deviating from an assessee’s comparables; (2) software development costs are revenue expenditure; (3) section 10A deduction rightly applies. The decision reinforces procedural fairness in transfer pricing audits and offers critical guidance on comparability analysis, benefiting multinational enterprises in the IT sector.