Section 10(37) of the Income Tax Act

Income-tax Act, 2025: s.11

Section 10(37) 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(37) is CIT v. Sunbeam Auto Ltd. (332 ITR 167), cited in 897 of the 558 judgments on BharatTax that turn on this section.

Leading authorities on Section 10(37)

CIT v. Sunbeam Auto Ltd.
332 ITR 167 · 2011 · High Court
897
citing judgments

The Commissioner cannot revise an assessment under Section 263 merely because the assessment order does not explicitly reflect an inquiry, or because the Commissioner holds a different opinion. An inquiry, even if considered inadequate, or an assessment based on a plausible view by the Assessing Officer after due examination, does not automatically make the order erroneous or prejudicial to the interests of the revenue.

ITO v. D.G. Housing Projects Ltd.
343 ITR 329 · 2012 · High Court
438
citing judgments

For exercising revisional jurisdiction under Section 263, the Commissioner must first find that the Assessing Officer's order is erroneous and unsustainable in law, as this is a condition precedent. An order is not erroneous merely because two views are possible, or if the Commissioner disagrees with the Assessing Officer's permissible view, or to simply remit the matter for further enquiries.

CIT v. Ghanshyam (HUF)
315 ITR 1 · 2009 · Supreme Court
363
citing judgments

Interest received under Section 28 of the Land Acquisition Act, 1894, is considered part of the enhanced compensation on compulsory acquisition of land. It is taxable as 'capital gains' and not separately as 'interest income' under the head Income from Other Sources.

Shyam Sunder v. Ram Kumar
8 SCC 24 · 2001 · Supreme Court
263
citing judgments

A statutory explanation that is clarificatory in nature applies retrospectively from the date the main provision came into force. However, if an explanation changes the law, it is not presumed to be retrospective, even if phrases like 'it is declared' or 'for the removal of doubts' are used.

Shyam Sunder v. Ram Kumar, (2001) 8 SCC 24 (para 44); Brij Mohan Das Laxman Das v. CIT
5 SCC 482 · 1997 · Supreme Court
261
citing judgments

For income to be assessable under the head 'Income from House Property' as per Section 22 of the Income Tax Act, 1961, beneficial ownership or the right to enjoy the property is sufficient; legal ownership is not a mandatory prerequisite.

Rama Bai v. CIT
181 ITR 400 · 1990 · Supreme Court
258
citing judgments

Interest income is taxable on either an accrual or cash basis, determined by accounting principles. This method was applicable prior to legislative changes that simplified the taxation of interest income.

KOTAK MAHINDRA CO. LTD. AND ANOTHER. 367 50.(1987) 3 SCC 544: MADHAV AYAWADANRAO HOSKOT v. STATE OF MAHARASHTRA. 51
10 SCC 1 · 2014 · Supreme Court
250
citing judgments

The judgment in Kotak Mahindra Co. Ltd. does not appear to be directly cited for a specific income tax proposition in the provided passages. The passages merely list it as one of several cases cited in subsequent judgments, without detailing its specific contribution to the legal reasoning.

Narayan Tatu Rane v. ITO
70 Taxmann.com 227 · 2016 · ITAT
220
citing judgments

Before revising an assessment order under Section 263, the CIT/PCIT must conduct their own inquiries or verifications to establish that the Assessing Officer's order is erroneous and unsustainable in law, rather than merely directing further inquiry or pointing out the AO's lack of inquiry.

Reliance Jute and Industries Ltd. v. CIT
1 SCC 139 · 1980 · Supreme Court
214
citing judgments

The cardinal principle of tax law dictates that the law applicable to an assessment is the law in force for the relevant assessment year, unless the statute expressly or implicitly provides otherwise. A clarificatory statutory explanation must be read into the main provision from its inception.

CIT v. Govindbhai Mamaiya
91 Taxmann.com 20 · 2018 · Supreme Court
205
citing judgments

Interest on enhanced compensation received under Section 28 of the Land Acquisition Act, 1894, is considered part of the compensation, not merely interest income, and is exigible to tax on a receipt basis.

Judgments on Section 10(37)

Rajesh Kumar, Gurgoan vs. DCIT, Circle 3(1), Gurgaon

In the result, appeal of the assessee is allowed

ITA 678/DEL/2026[2020-21]Status: DisposedITAT Delhi10 Jul 2026AY 2020-21

Bench: Shri Satbeer Singh Godara & Shri Krinwant Sahayassessment Year: 2020-21 Rajesh Kumar, Vs. Dcit, 4/178, Shivaji Nagar, Circle-3(1), Gurgaon, Haryana Gurgaon Pan: Avepr2117E (Appellant) (Respondent) Assessee By Ms. Airik Singla, Adv. Department By Sh. Sudip Majumdar, Sr. Dr Date Of Hearing 09.07.2026 Date Of Pronouncement 09.07.2026 Order Per Satbeer Singh Godara, Jm This Assessee’S Appeal For Assessment Year 2020-21, Arises Against The Commissioner Of Income Tax (Appeals)/National Faceless Appeal Centre [In Short, The “Cit(A)/Nfac”], Delhi’S Din & Order No. Itba/Nfac/S/250/2025-26/1083175750(1), Dated 01.12.2025 Involving Proceedings Under Section 147 Of The Income- Tax Act, 1961 (Hereinafter Referred To As ‘The Act’). Heard Both The Parties. Case File Perused. 2. It Emerges During The Course Of Hearing That The Sole Substantive Issue Between The Parties Is That Of Correctness Of The Learned Lower Authorities’ Action Assessing The Assessee’S Interest Component Of Land Acquisition Compensation U/S 28 Of The Land Acquisition Act, 1894, While Invoking Section 57(Iv) R.W.S. 56(1)(A) R.W.S. 145A(B) Of The Act. 3. Learned Sr. Dr Representing The Department Vehemently Argued That The Instant Issue Is No More Res Integra In Light Of Mahender Pal Narang Vs. Cbdt (2020) 423 Itr 13 (P&H) As Well As Pcit Vs. Inderjit Singh Sodhi Huf (2024) 161 Taxmann.Com 301 (Del.) Wherein The Department Has Succeeded Before Their Lordships That The Impugned Interest Component Ought To Be Assessed As Income From “Other” Sources Only. 4. We Have Given Our Thoughtful Consideration To The Assessee’S Pleadings & Revenue’S Foregoing Vehement Contention. It Emerges That This Tribunal’S Recent Decision In Pawan Kumar Vs. Pcit (2024) 159 Taxmann.Com 61 (Del.-Trib.) Has Distinguished The Said Case Law As Under:

Section 10(37)Section 142(1)Section 143Section 143(1)(a)Section 143(2)Section 143(3)Section 147Section 263Section 28Section 56(2)(viii)