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“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
89
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
89
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

Jamaluddin S/O Shri Chunir Ahmed, Ghaziabad vs. ITO Ward 1(3), Ghaziabad

ITA 3551/DEL/2025[2014-15]Status: DisposedITAT Delhi17 Dec 2025AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 143(3)Section 145(3)Section 2(22)(e)

Section 29 of the Act prescribes that the income referred to in section 28 which is assessable under the head “Profits and gains of business or profession” shall be computed in accordance with the provisions contained in sections 30 to 43A of the Act. Section 145 of the Act provides

Jamaluddin, Ghaziabad vs. ITO Ward-1(3), Ghaziabad

ITA 3550/DEL/2025[2014-15]Status: DisposedITAT Delhi17 Dec 2025AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 143(3)Section 145(3)Section 2(22)(e)

Section 29 of the Act prescribes that the income referred to in section 28 which is assessable under the head “Profits and gains of business or profession” shall be computed in accordance with the provisions contained in sections 30 to 43A of the Act. Section 145 of the Act provides

ACIT, Circle-1, Nashik vs. Taparia Tools Limited, Nashik

In the result, both the appeal of the Revenue as well as Cross Objection of the assessee are allowed for statistical purposes as per the terms indicated above

ITA 1337/PUN/2025[2017-18]Status: DisposedITAT Pune10 Dec 2025AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1337/Pun/2025 Assessment Year : 2017-18

For Appellant: Shri Amit BobdeFor Respondent: Shri Viral Shah
Section 142(1)Section 147Section 148Section 37(1)

exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head-Profits and gains of business or profession. (Addition of ₹87,64,74,079)” CO No.30/PUN/2025 Taparia Tools Limited 4. Aggrieved assessee preferred appeal before ld.CIT(A) and along with

Dy. Commissioner of Income Tax, Circle-1(1), Pune vs. Honeywell Automation India Limited, Pune

In the result, the appeal of the Revenue is dismissed

ITA 1096/PUN/2025[2020-21]Status: DisposedITAT Pune09 Dec 2025AY 2020-21

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: Shri Siddhesh Chaugule &For Respondent: Shri Manish M. Mehta
Section 135Section 143(1)Section 143(2)Section 143(3)Section 37Section 37(1)Section 80GSection 80G(1)(ii)Section 80G(2)(a)Section 80G(5)(vi)

Hometown Solutions Foundation (PAN:AADCH4630B). (ii). The said CSR expenditure was added back in the computation of income under the head “Profits and gains of business or profession” in accordance with Explanation 2 to Section 37(1) of the Act. (iii). As the donee institution was approved

Sri. Chandrakant Shamappa Kontha, Hubli vs. DCIT, Circle-1 & Tps, Hubli

In the result both the appeals are allowed for statistical purposes

ITA 2397/BANG/2024[2020-21]Status: DisposedITAT Bangalore09 Dec 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

Section 143Section 36Section 5

Shri Chandrakant Shamappa Kpntha Versus DCIT Circle (1) (1) & TPS Hubli computing the income under the head ̳Profits and gains of business or profession ‘. Clause (va) of the said sub-section provides for deduction of any sum received by the assessee from any of his employees to which the provisions

Sri. Chandrakant Shamappa Kontha, Hubli vs. DCIT, Circle-1(1) & Tps, Hubli

In the result both the appeals are allowed for statistical purposes

ITA 2396/BANG/2024[2019-20]Status: DisposedITAT Bangalore09 Dec 2025AY 2019-20

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

Section 143Section 36Section 5

Shri Chandrakant Shamappa Kpntha Versus DCIT Circle (1) (1) & TPS Hubli computing the income under the head ̳Profits and gains of business or profession ‘. Clause (va) of the said sub-section provides for deduction of any sum received by the assessee from any of his employees to which the provisions

Asirvad Micro Finance Limited, Anna Salai vs. Assistant Commissioner of Income Tax, Corporate Circle -1(1), Chennai

In the result, the appeal of the assessee is allowed

ITA 1140/CHNY/2025[2016-17]Status: DisposedITAT Chennai05 Dec 2025AY 2016-17

Bench: Shri Aby T Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita No.1140/Chny/2025 Assessment Years: 2016-17 Asirvad Micro Finance Limited, Assistant Commissioner Of No.9, 9Th Floor, Club House Road, Income Tax, Annasalai, Corporate Circle-1(1), Chennai-600 002 Chennai. [Pan: Aagca5275J] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee By : Mr.P.R.Prasanna Varma, Fca & Mr.Arjun Rajagopalan, C.A. प्रत्यर्थी की ओर से /Revenue By : Mr.Bipin C.N, Cit सुनवाई की तारीख/Date Of Hearing : 25.09.2025 घोषणा की तारीख /Date Of Pronouncement : 05.12.2025 आदेश / O R D E R Per Amitabh Shukla, A.M :

For Appellant: Mr.P.R.Prasanna Varma, FCA &For Respondent: Mr.Bipin C.N, CIT
Section 2(18)Section 2(71)Section 56(2)Section 56(2)(viib)Section 8

clause (x) of clause (24) of section 2, if such income is not chargeable to income-tax under the head "Profits and gains of business or profession";(id)income by way of interest on securities, if the income is not chargeable to income-tax under the head "Profits and gains ... furniture belonging to the assessee and let on hire, if the income is not chargeable to income-tax under the head "Profits and gains of business or profession";(iii)where an assessee lets on hire machinery, plant or furniture belonging to him and also buildings, and the letting

Starkey Laboratories India Pvt. Ltd., Noida vs. DCIT Circle-24(2), New Delhi

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 3205/DEL/2023[2016-17]Status: DisposedITAT Delhi05 Dec 2025AY 2016-17

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwalstarkey Laboratories Dy. Cit, India Pvt. Ltd., Circle-24(2), C-2, Sector-7, Vs. New Delhi. Gautam Buddha Nagar-201301, Uttar Pradesh. Pan-Aakcs6072R (Appellant) (Respondent)

Section 143(3)Section 250Section 250(1)(b)Section 37(1)Section 92C

respectfully submitted that as per Section 145(1) of the Income-tax Act, 1961, income chargeable under the head "Profits and gains of business or profession" shall be computed in accordance with either the cash or mercantile system of accounting, regularly employed by the assessee. The appellant follows the mercantile

Deputy Commissioner of Income Tax, Bengaluru vs. Flipkart India Pvt Ltd, Bengaluru

In the result, both the appeals filed by the Revenue are dismissed

ITA 1395/BANG/2025[2021-22]Status: DisposedITAT Bangalore04 Dec 2025AY 2021-22

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Shri Shivanand Kalakeri, CIT(DR)(ITAT), BengaluruFor Respondent: Shri Ajay Vohra, Sr. Advocate
Section 143(3)Section 37

computation of total income has to be classified under the following heads of income viz., Salaries, Income from house property, Profits and gains of business or profession, Capital gains and Income from other sources. Sec. 28 of the Act lays down various categories of income that shall be chargeable ... income-tax under the head "Profits and gains of business or profession". The income of ITA Nos.1394 & 1395/Bang/2025 Page 10 of 26 the Assessee in the present case would fall within Sec. 28(i) of the Act viz., "the profits and gains of any business or profession which was carried

Deputy Commissioner of Income Tax, Central Circle-1(4), Bengaluru vs. Flipkart India Pvt Ltd, Bengaluru

In the result, both the appeals filed by the Revenue are dismissed

ITA 1394/BANG/2025[2020-21]Status: DisposedITAT Bangalore04 Dec 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Shri Shivanand Kalakeri, CIT(DR)(ITAT), BengaluruFor Respondent: Shri Ajay Vohra, Sr. Advocate
Section 143(3)Section 37

computation of total income has to be classified under the following heads of income viz., Salaries, Income from house property, Profits and gains of business or profession, Capital gains and Income from other sources. Sec. 28 of the Act lays down various categories of income that shall be chargeable ... income-tax under the head "Profits and gains of business or profession". The income of ITA Nos.1394 & 1395/Bang/2025 Page 10 of 26 the Assessee in the present case would fall within Sec. 28(i) of the Act viz., "the profits and gains of any business or profession which was carried

ACIT, Circle - 3 3 1, Mumbai vs. Jamnagar Utilities and Power Pvt Ltd, Mumbai

In the result, both the appeals of the Revenue are allowed

ITA 5312/MUM/2024[2019-20]Status: DisposedITAT Mumbai04 Dec 2025AY 2019-20

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Appellant: Mr. Nimesh Vora/For Respondent: Mr. Vivek Perampurna, CIT-DR
Section 115JSection 135Section 139(1)Section 143(3)Section 144BSection 43ASection 80G

purposes of the business 41 or profession shall be allowed in computing the income chargeable under the head “Profits and gains of business or profession”. 42[ 43[Explanation 1.]- 45 [Explanation 2.-For the removal of doubts, it is hereby declared that for the purposes of sub-section ... notified Income Computation and Disclosure Standards (ICDS) to be followed for the purposes of computation of income chargeable under the head "Profits and gains of business or profession". 12.2The ICDS-I, provides that marked to market loss or an expected loss shall not be recognized unless the recognition

ACIT, Circle - 3 3 1, Mumbai vs. Jamnagar Utilities and Power Pvt Ltd, Mumbai

In the result, both the appeals of the Revenue are allowed

ITA 5310/MUM/2024[2020-21]Status: DisposedITAT Mumbai04 Dec 2025AY 2020-21

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Respondent: Mr. Nimesh Vora/
Section 115JSection 135Section 139(1)Section 143(3)Section 144BSection 43ASection 80G

purposes of the business 41 or profession shall be allowed in computing the income chargeable under the head “Profits and gains of business or profession”. 42[ 43[Explanation 1.]- 45 [Explanation 2.-For the removal of doubts, it is hereby declared that for the purposes of sub-section ... notified Income Computation and Disclosure Standards (ICDS) to be followed for the purposes of computation of income chargeable under the head "Profits and gains of business or profession". 12.2The ICDS-I, provides that marked to market loss or an expected loss shall not be recognized unless the recognition

Kantaben Vajubhai Paghadal, Rajkot, Gujarat vs. ITO WD 1(2)(1), Rajkot

In the result, appeal filed by the assessee is allowed

ITA 552/RJT/2025[2016-17]Status: DisposedITAT Rajkot28 Nov 2025AY 2016-17

Bench: Dr. Arjun Lal Sainiआयकरअपीलसं./Ita No.552/Rjt/2025 "नधा"रणवष" / Assessment Year: (2016-17) (Hybrid Hearing) Kantaben Vajubhai Paghadal Vs. It-Office, New Aayakar At- Charan Samadhiyala, Bhawan, Jetpur – 360370(Gujarat) Rajkot - 360370 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Cxmpp2962D (Appellant) (Respondent)

For Appellant: Shri Sagar Shah, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR
Section 10(37)Section 143(3)Section 145BSection 250Section 56

compensation or on enhanced compensation.- 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

Income Tax Officer, Ward 2, Ahmednagar vs. Kanifnath Grmain Bigar Sheti Sahakari Patsanstha Maryadit, Malad

In the result, appeal of the Revenue is dismissed

ITA 2272/PUN/2025[2020-21]Status: DisposedITAT Pune28 Nov 2025AY 2020-21

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपऩल सं. / Ita No.2272/Pun/2025 निर्धारण वषा / Assessment Year: 2020-21 The Income Tax Officer, V Kanifnath Gramin Bigar Sheti Ward-2, Ahmednagar. S Sahakari Patsanstha Maryadit, At Post Maldad, Taluka Sangamner, Ahmednagar – 422608. Pan: Aabak1395E Appellant / Revenue Respondent /Assessee Assessee By Shri Pramod S Shingte Revenue By Shri Arvind Renge –Addl.Cit(Virtual Hearing) Date Of Hearing 04/11/2025 Date Of Pronouncement 28/11/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By Revenue Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Passed Under Section 250 Of The Income Tax Act, 1961 For The A.Y.2020-21 Dated 01.07.2025, Emanating From Order U/S.143(3) R.W.S144B Of The Income Tax Act, 1961, Dated 22.09.2022. The Revenue Has Raised The Following Concise Grounds Of Appeal :

Section 143(3)Section 250Section 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

Sugarcane Producers Vividha Karyakari Sahakari Society Ltd, Malsiras vs. ITO Ward 2 Pandharpur, Pandharpur

In the result, appeal of the assessee is partly allowed

ITA 1174/PUN/2025[2017-2018]Status: DisposedITAT Pune28 Nov 2025AY 2017-2018

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपऩल सं. / Ita No.1174/Pun/2025 निर्धारण वषा / Assessment Year: 2017-18 Sugarcane Producers Vividha V The Income Tax Officer, Karyakari Sahakari Society S Ward-2, Pandharpur. Limited, At Post Malinagar, Malsiras, District Solapur, Solapur – 413108. Maharashtra. Pan: Aaffs4023E Appellant/ Assessee Respondent / Revenue Assessee By Shri Girish Ladda Revenue By Shri Ambarnath Khule (Through Virtual) – Jcit(Dr) Date Of Hearing 24/11/2025 Date Of Pronouncement 28/11/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By The Assessee Against The Order Of Ld.Additional Commissioner Of Income Tax(Appeal)-1, Visakhapatnam Passed Under Section 250 Of The Income Tax Act, 1961 For A.Y.2017-18 On 10.03.2025 Emanating From Assessment Order U/S.143(3) R.W.S 147 Dated 24.12.2019. The Assessee Has Raised The Following Grounds Of Appeal :

Section 143(3)Section 250Section 80PSection 80P(2)Section 80P(2)(a)

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

Marvell India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-4(1)(1), Bengaluru

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

ITA 1608/BANG/2024[2020-21]Status: DisposedITAT Bangalore28 Nov 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Rahul Chaudharym/S. Marvell India Private Limited 10Th Floor, Tower D & E Global Technology Park, Marathahalli Outer Ring Road Devarabeesanahalli Village Varthurhobli Bangalore 560 103 ………. Appellant [Pan: Aaecm5559R]

For Appellant: Sri Chavali NarayanFor Respondent: Sri Muthu Shankar
Section 143(3)Section 144C(1)Section 144C(13)Section 200ASection 234ASection 234BSection 234CSection 270ASection 274Section 28

exclusively for the 8 Assessment Year 2020-2021 purpose of business and profession while computing the income under the head ‘Profits and gains of business or profession’. It is proposed to amend clause (ii) of the said sub-section (1) so as to provide that goodwill of a business

Thaicom Public Company Ltd, Delhi vs. ACIT, Central Circle Intl Tax-3(1)(1), Delhi

In the result, impugned order is quashed and appeal of the assessee is allowed

ITA 1803/DEL/2025[2018-19]Status: DisposedITAT Delhi28 Nov 2025AY 2018-19

Bench: Shri Vikas Awasthy & Shri M. Balaganeshआअसं.1803/िद"ी/2025(िन.व. 2018-19) Thaicom Public Company Ltd., (Earlier Known As Shin Satellite Public Company Ltd.), C/O Mohinder Puri & Co. 1A-D, Vandhna, 11 Tolstoy Marg, New Delhi 110001 ...... अपीलाथ"/Appellant Pan No: Aagcs-4481-E बनाम Vs. Assistant Commissioner Of Income Tax, Circle 3(1)(1), International Taxation, ..... "ितवादी/Respondent New Delhi 11002

For Appellant: Shri Ajay Vohra, Sr. Advocate with S/Shri Jatinder Singh & Akshay MathurFor Respondent: Shri M.S Nethrapal, CIT-DR (Through VC)
Section 143(3)Section 147Section 148ASection 9(1)(vi)

salary or remuneration by whatever name called received by partners of a firm would be chargeable to tax under the head profits and gains of business or profession. The proviso to Section 28 (v) states that where such salary has been allowed to be deducted under Section

Nutan Nagrik Sahakari Bank Limited, Ahmedabad vs. The Pr. CIT, Ahmedabad-1, Ahmedabad

In the result, the appeal of the assessee is partly allowed

ITA 1023/AHD/2025[2020-21]Status: DisposedITAT Ahmedabad27 Nov 2025AY 2020-21

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokar

For Appellant: Shri Bandish Soparkar, ARFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 10(15)Section 143(3)Section 144BSection 14ASection 263Section 28Section 36(1)(va)Section 36(1)(viia)

even though this income consisted of capital gains of ₹6,36,76,032/- which does not fall under the head “Profits and Gains of Business or Profession.” The Principal CIT observed that section 36(1)(viia) is a deduction allowable only while computing income under section ... applicable to “total income” including capital gains or whether the deduction is only restricted to "total income" under the head "Profits and Gains of Business or Profession”. Section 36(1)(viia) of the Act allows certain banks to claim a deduction for the provision they create for bad and doubtful

Sachin Prakashchand Aanchaliya, Aurangabad vs. ITO Ward 1 (1), Aurangabad

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

ITA 2345/PUN/2025[2013-2014]Status: DisposedITAT Pune27 Nov 2025AY 2013-2014

Bench: Or At The Time Of Hearing Of The Appeal.”

Section 144Section 144BSection 147Section 250Section 250(4)

advancesas mentioned by the appellant in Renukamata Multi-State Co-operative Bank Ltd  Comprehensive computation of business income under the head "Profits and Gains of Business or Profession"  Cash book etc 8.2 In addition, the appellant has not submitted key financial records such as the ledger account, ITR, books

Urlife Lifestyle Wellness Limited, Hyderabad vs. Assistant Commissioner of Income-Tax, Corporate Circle 4(1), Chennai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 2160/CHNY/2025[AY 2021-22]Status: DisposedITAT Chennai27 Nov 2025

Bench: Shri George George K & Shri Jagadishआयकर अपील सं./Ita No.: 2160/Chny/2025 िनधा"रण वष"/Assessment Year: 2021-22 Urlife Lifestyle Wellness The Assistant Commissioner Ltd., Vs. Of Income Tax, 2Nd Floor, Corporate Circle – 4(1), Apollo Health City, Chennai. Apollo Hospitals Complex, Jubilee Hills, Film Nagar, Hyderabad – 500 096. Pan: Aadca 8021H (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri K. Abhiroop Bhargav, Ca ""यथ" क" ओर से/Respondent By : Ms. T. Mythili, Jcit सुनवाई क" तारीख/Date Of Hearing : 26.11.2025 घोषणा क" तारीख/Date Of Pronouncement : 27.11.2025

For Appellant: Shri K. Abhiroop Bhargav, CAFor Respondent: Ms. T. Mythili, JCIT
Section 11Section 143(3)Section 250Section 37(1)

exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head “Profits and gains of business or profession”. From the reading of above section, it is clear that appellant had to prove that the claimed consultancy expenses were laid