Section 10(1) of the Income Tax Act
Income-tax Act, 2025: s.11
Section 10(1) falls under section 10 of the Income-tax Act, 1961, which corresponds to section 11 (Incomes not included in total income) of the Income-tax Act, 2025.
Read section 11 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 10(1) is CIT v. Bilahari Investment (P) Ltd. (299 ITR 1), cited in 206 of the 394 judgments on BharatTax that turn on this section.
Leading authorities on Section 10(1)
The project completion method and the percentage of completion method are both recognized methods for recognizing income from real estate contracts.
Income is considered agricultural income, exempt under Section 10(1), only if the land undergoes a measure of cultivation involving basic primary operations prior to germination and subsequent post-germination activities requiring human skill and labour.
The principle of res judicata or estoppel does not strictly apply to Income Tax authorities, including the Tribunal. However, an earlier decision on the same question should not be reopened if it was arrived at after due inquiry, was not arbitrary or perverse, and no fresh facts are presented.
A business loss arising from employee embezzlement or fraud is deemed to have occurred only when the employer becomes aware of it and realizes that the embezzled amounts cannot be recovered.
An assessment or addition to income cannot be made solely based on a retracted statement, especially when it is not corroborated by seized material or other concrete evidence. The revenue must produce evidence to establish claims like understatement of sale consideration or 'on-money'.
If the actual cost of an asset was wrongly assessed in earlier years, it can be recomputed and corrected in subsequent assessment years. Interest incurred before production on borrowed money for plant construction can be capitalized and added to the cost of fixed assets.
Agricultural income exemption is denied when no lease of land is created, as leasing might be prohibited under relevant land reform acts.
The 'written down value' (WDV) under Section 43(6)(b) is determined by depreciation that has been 'actually allowed', meaning it has been taken into account or granted and given effect to by the Income-tax Officer in computing taxable income.
Condonation of delay in filing appeals is not an exception and should not be an anticipated benefit for government departments. Departments must demonstrate reasonable and acceptable reasons for delay, with bona fide effort, and mere procedural red tape is insufficient grounds.
Income-tax assessments made to the best of the Assessing Officer's judgment must be legal and regular, not arbitrary, vague, or fanciful. The assessment must be based on reason and justice, following established legal principles rather than private opinion or whim.
