“profits and gains of business or profession”

Income HeadsSection 28Section 281,710 judgments

The decision most relied on for profits and gains of business or profession is CIT v. Excel Industries Ltd. (358 ITR 295), cited in 935 judgments on BharatTax.

Leading authorities on profits and gains of business or profession

CIT v. Excel Industries Ltd.

358 ITR 295 · 2013 · Supreme Court

935

citing judgments

When an income or expenditure is revenue neutral across different assessment years, where any benefit derived is offset by a corresponding liability or reversal, no additional tax liability arises, particularly concerning income recognition under the mercantile system of accounting.

Southern Technologies Ltd. v. JCIT

320 ITR 577 · 2010 · Supreme Court

353

citing judgments

The case concerns the allowability of deductions for provisions made under Section 36 of the Income Tax Act, 1961, especially those related to bad and doubtful debts. It distinguishes such deductions from the recognition of interest income on non-performing assets (NPAs).

Attar Singh Gurmukh Singh v. ITO

191 ITR 667 · 1991 · Supreme Court

254

citing judgments

Section 40A(3) is not absolute, and its application considers business expediency, practical difficulties, and other relevant factors, while keeping in mind its objective to curb the practice of ploughing unaccounted money into the system.

Karanpura Development Co. Ltd. v. CIT

44 ITR 362 · 1962 · Supreme Court

157

citing judgments

The income derived from letting out assets, such as coal mining leases, constitutes "profits and gains of business or profession" if the primary object and activity of the assessee company are to acquire, develop, and sub-lease such assets. This classification holds even if the income arises from letting, provided the letting itself constitutes the assessee's business.

(P.) Ltd. v. CIT

56 ITR 52 · 1965 · Supreme Court

146

citing judgments

Expenditure is revenue if incurred for operating a business to earn profit, even if an incidental enduring advantage results; it is capital if it creates an asset or an enduring advantage for the entire business structure.

Anupam Tele Services v. ITO

366 ITR 122 · 2014 · High Court

124

citing judgments

Section 40A(3) disallowances are not absolute; genuine and bonafide cash payments, where the payee's identity is established and business expediency is proven, fall outside its scope, as the section's purpose is to curb unaccounted money, not disallow genuine expenditure.

ACG Associated Capsule Private Limited v. Commissioner of Income Tax, Central IV, Mumbai

3 SCC 321 · 2022 · Reported

citing judgments

Profits of a business are computed under the head 'Profits and Gains of Business or Profession' and then reduced by specific receipts mentioned in Explanation (baa) to Section 80HHC. This means that for the purposes of Section 80HHC, only profits computed under the business head are considered, with subsequent adjustments for specified receipts.

Rayala Corporation Pvt. Ltd. v. ACIT

386 ITR 500 · 2016 · Supreme Court

citing judgments

If an assessee company's main business object is to acquire and rent out properties, the rental income derived is taxable as 'Profits and gains of business or profession', rather than 'Income from house property', as the nature of the activity constitutes a business.

Judgments citing profits and gains of business or profession

Ravi Shroff, Mumbai vs. Assistant Commissioner of Income Tax - 25(3), Mumbai, Bandra (East)

In the result, all remaining ground are allowed with the aforesaid directions

ITA 4186/MUM/2023[2015-16]Status: DisposedITAT Mumbai07 Nov 2025AY 2015-16

Bench: SHRI PAWAN SINGH (Judicial Member), SHRI PRABHASH SHANKAR (Accountant Member)

Section 143(3)Section 234BSection 234CSection 250Section 254(1)Section 28Section 28(1)

Nihon Nohyaku Co. Ltd (NNCL) pursuant to a Share Purchase Agreement (SPA) under the Ravi shroff (AY 2015-16) head "Profits and Gains of Business or Profession" instead of the head "Capital Gains.” 1.2. On the facts and in the circumstances of the case ... received or receivable in cash or kind under an agreement for not carrying business or profession is treated as profit or gain from business or profession, thereby taxable as business receipt. As noted earlier the assessee has received consideration only for transfer of shares held in HCL and no consideration

Babubhai Kanjibhai Sakaria, Jetpur vs. ITO WD 1(2)(1), Rajkot

In the result, the appeal filed by the assessee is allowed

ITA 156/RJT/2025[2016-17]Status: DisposedITAT Rajkot06 Nov 2025AY 2016-17

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं./Ita No. 156/Rjt/2025 (Assessment Year: 2016-17) Babubhai Kanjibhai Sakariya Vs. Ito, Wd 1(2)(1), Rajkot Plot No. 82 Satyam Park, Amarnagar Aaykar Bhavan, Race Course Ring Road, Jetpur,(Rajkot-Gujarat) -360370 Road, Rajkot 360001 "ायीलेखासं./जीआइआरसं./Pan/Gir No.: Agnps7407C (अपीलाथ"/Appellant) (""थ"/Respondent)

For Appellant: Shri Rajendra Singhal, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 194ASection 250Section 28

delayed compensation or on enhancedcompensation.-46.1 The existing provisions of Income Tax Act, 1961, provide that income chargeable under the head "Profits and gains of business or profession" or "Income from other sources", shall be computed in accordance with either cash or mercantile system of accounting regularly employed

Mohit Vijaykumar Gupta, Mumbai vs. The DCIT, Circle-2(1)(1), Ahmedabad

In the result, the appeal of the assessee is partly allowed, Ground No

ITA 1091/AHD/2025[2021-22]Status: DisposedITAT Ahmedabad06 Nov 2025AY 2021-22

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyalआयकर अपील सं /Ita No.1091/Ahd/2025 िनधा"रण वष" /Assessment Year : 2021-22 Mohit Vijaykumar Gupta The Dcit बनाम/ B-1001, Juhu Trishul, Circle-2(1)(1) V/S. Gulmohar Cross Road No.6 Ahmedabad – 380 015 Jvpd Vile Parle West Mumbai – 400 049 "थायी लेखा सं./Pan: Adfpg 7162 D (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee By : Shri J. C. Desai, Ca Revenue By : Shri B.P. Srivastava, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 06/08/2025 घोषणा की तारीख /Date Of Pronouncement: 06/11/2025 आदेश/O R D E R Per Siddhartha Nautiyal, Jm: The Present Appeal Has Been Preferred By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As ‘Cit(A)’] Dated 14/12/2025 Passed U/S.250 Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) For The Assessment Year (Ay) 2021-2022. 2. The Assessee Has Raised The Following Grounds Of Appeal: Mohit Vijaykumar Gupta Vs. Dcit Asst. Year : 2021-22

For Appellant: Shri J. C. Desai, CAFor Respondent: Shri B.P. Srivastava, Sr.DR

Section 22Section 23(1)(c)Section 24Section 250

where the profits are chargeable to tax under that head. As the assessee’s income was not assessed under the head “Profits and Gains of Business or Profession”, the exemption could not be claimed. The CIT(A) further held that the option to designate two Mohit Vijaykumar Gupta vs. DCIT ... years. The CIT(A) mechanically confirmed the addition, merely observing that the assessee did not have income taxable under the head “Profits and Gains of Business or Profession.” The Counsel Mohit Vijaykumar Gupta vs. DCIT Asst. Year : 2021-22 contended that this finding is legally unsustainable and contrary

Akashdeep Cloth Centre, Kannad vs. Principal CIT, Nashik

In the result, both the appeals filed by the respective assessees are allowed

ITA 959/PUN/2024[2019-20]Status: DisposedITAT Pune04 Nov 2025AY 2019-20

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2019-20

For Appellant: S/Shri Shubham N. Rathi and Ashutosh DhootFor Respondent: Shri Amol Khairnar, CIT-DR

Section 115BSection 142(1)Section 143(3)Section 263Section 69Section 69B

proceedings which has duly been accounted for in the audited books and included in the computation of income under the head ‘ Profits and gains of business or profession’ and the Assessing Officer has taken a plausible view, therefore, the order cannot be held to be erroneous and prejudicial ... assessee has established the business nexus and therefore, the surrendered income rightly constitutes the business income assessable under the head ‘Profits and gains of business or profession”. 18. So far as the decision in the case of Dhanush General Stores vs. CIT (supra) is concerned, he submitted that in that

Manmandir Cloth Centre, Kannad vs. PCIT, Nashik

In the result, both the appeals filed by the respective assessees are allowed

ITA 1012/PUN/2024[2019-20]Status: DisposedITAT Pune04 Nov 2025AY 2019-20

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2019-20

For Appellant: S/Shri Shubham N. Rathi and Ashutosh DhootFor Respondent: Shri Amol Khairnar, CIT-DR

Section 115BSection 142(1)Section 143(3)Section 263Section 69Section 69B

Dy..C.I.T., Bangalore vs. M/S State Bank of Mysore, Bangalore

ITA 684/BANG/2015[2011-12]Status: DisposedITAT Mumbai03 Nov 2025AY 2011-12

Bench: Justice (Retd.) C V Bhadang & Ms Padmavathy S, Am

For Appellant: Shri Ketan Ved & Ninad PatadeFor Respondent: Shri P.C. Chhotaray, Spl. Counsel

Section 2Section 250Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)Section 41(1)

specified entity, an amount not exceeding twenty per cent of the profits derived from eligible business computed under the head "Profits and gains of business or profession" (before making any deduction under this clause) carried to such reserve account:” 31. From the plain reading of the above provision

State Bank of Mysore, Bangalore vs. JCIT, Bangalore

ITA 661/BANG/2015[2011-12]Status: DisposedITAT Mumbai03 Nov 2025AY 2011-12

Bench: Justice (Retd.) C V Bhadang & Ms Padmavathy S, Am

For Appellant: Shri Ketan Ved & Ninad PatadeFor Respondent: Shri P.C. Chhotaray, Spl. Counsel

Section 2Section 250Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)Section 41(1)

Rama Damu Bhagat, Panvel vs. ITO Ward-1, Panvel

In the result, appeal of the Assessee is allowed for statistical purpose

ITA 2109/PUN/2025[2013-14]Status: DisposedITAT Pune31 Oct 2025AY 2013-14

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपऩल सं. / Ita No.2109/Pun/2025 निर्धारण वषा / Assessment Year: 2013-14 Rama Damu Bhagat, V The Income Tax Officer, Room No.4, Yashoganga S Ward-1, Panvel. Chg, Tilak Road, Panvel – 410206. Maharashtra. Pan: Bicpb8875P Appellant/ Assessee Respondent / Revenue Assessee By Ca Ajinkya Vaishampayan(Virtual Hearing) Revenue By Shri Sandeep Sathe – Jcit(Dr) Date Of Hearing 08/10/2025 Date Of Pronouncement 31/10/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Filed By The Assessee Against The Order Of Ld.Commissioner Of Income Tax Appeal(Nfac) Passed Under Section 250 Of The Income Tax Act, 1961 For A.Y.2013-14 Dated 25.09.2023 Emanating From The Assessment Order Under Section 144 R.W.S 147 Of The Income Tax Act, 1961 Dated 14.11.2019. The Grounds Of Appeal Raised By The Assessee Are As Under :

Section 144Section 148Section 207(2)Section 207(2)(b)Section 249(4)(b)Section 250Section 48

appreciate the facts that: - a) The disputed income does not fall under the head Income from Profits and Gains of Business or Profession', and b) The Assesee was a senior citizen, above 60 years of age during the previous year, and c) The disputed income was not chargeable ... shall not apply to an individual resident in India, who— (a) does not have any income chargeable under the head "Profits and gains of business or profession"; and (b) is of the age of sixty years or more at any time during the previous year.]” 7.1 Thus, as per Section

Shri Murli Manohar Nagari Sahakari Patsanstha Maryadit, Mahad vs. Income-Tax Officer, Panvel

In the result, appeal of the assessee is partly allowed

ITA 934/PUN/2025[2017-18]Status: DisposedITAT Pune30 Oct 2025AY 2017-18

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपऩल सं. / Ita No.934/Pun/2025 निर्धारण वषा / Assessment Year: 2017-18 Shri Murli Manohar Nagari V Income Tax Officer. Sahakaripatsansthamaryadit, S. 1295, Pimpal Par, M.G.Road, Juni Peth, Mahad, Mahad – 402301. Maharashtra. Pan: Aabas5404L Appellant/ Assessee Respondent / Revenue Assessee By Shri Anup Shaha Revenue By Shri Dayanand Jawalikar–Addl.Cit(Dr) Date Of Hearing 14/10/2025 Date Of Pronouncement 30/10/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Is Filed By The Assessee Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Passed Under Section 250 Of The Income Tax Act, 1961 For A.Y.2017-18, Dated 11.03.2024 Emanating From Assessment Order U/S.143(3) R.W.S 263 Read With Section 144B Of The I.T.Act, Dated 17.03.2023. The Assessee Has Raised Following Grounds Of Appeal :

Section 143(2)Section 143(3)Section 144BSection 250Section 263Section 80PSection 80P(2)(d)

Section 80P(2) of the I.T. Act for a Co-operative Society that is assessed to tax under the head of 'Profits and Gains of Business or Profession' is of the whole of the amount of profits and gains of business attributable to any one or more of its activities