Section 112 of the Income Tax Act

Income-tax Act, 2025: s.197

Section 112 of the Income-tax Act, 1961 corresponds to section 197 (Tax on long-term capital gains) of the Income-tax Act, 2025.

Read section 197 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 112 is CIT v. Ace Builders (P) Ltd. (281 ITR 210), cited in 88 of the 158 judgments on BharatTax that turn on this section.

Leading authorities on Section 112

CIT v. Ace Builders (P) Ltd.
281 ITR 210 · 2005 · High Court
88
citing judgments

The deeming fiction in Section 50, which treats capital gains from depreciable assets as short-term, applies only for the purpose of computing capital gains under that section. For other provisions, such as set-off of losses under Section 74 or deductions under Section 54E/54EC, the asset's original character (long-term or short-term) is to be considered.

Andhra Pradesh in CIT v. Smt. Nayana P. Dedhia
270 ITR 572 · 2004 · High Court
82
citing judgments

Guidelines issued by the Central Board of Direct Taxes (CBDT) under Section 119 of the Income Tax Act, which relax the rigour of law, are binding on all income tax officers responsible for implementing the Act, who must follow these orders and instructions.

Katira Construction Ltd. v. UOI
31 Taxmann.com 250 · 2013 · High Court
77
citing judgments

A person entering into a works contract with an enterprise eligible for deduction under Section 80-IA is not entitled to claim the tax benefit under Section 80-IA of the Act.

Joint Commissioner. 10. In Shin Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.
7 SCC 234 · 2005 · Reported
75
citing judgments

A statute prescribing a procedure using negative language (e.g., 'in no other manner') imposes absolute requirements, and failure to comply will invalidate the entire proceeding.

ITO v. Bachu Lal Kapoor
60 ITR 74 · 1966 · Supreme Court
60
citing judgments

Income must be charged only once, preventing double taxation. If income is mistakenly assessed in the hands of individual members instead of the Association of Persons or Hindu Undivided Family, or vice versa, the Income Tax Officer must make appropriate adjustments for the tax already realized.

CIT v. Manmohan Das
59 ITR 699 · 1966 · Supreme Court
47
citing judgments

The eligibility for an assessee to carry forward and set off losses, including capital losses, against future income is determined by the Assessing Officer in the year the set-off is claimed, not in the year the loss was incurred.

Madhav Rao Jivaji Rao Scindia Bahadur v. Union of India
3 SCR 9 · 1971 · Reported
43
citing judgments

A word, clause, or sentence from a court judgment, when taken out of context, does not represent a complete exposition of the law on a question that the judgment did not explicitly address.

Amal Kumar Ghosh v. Asstt. CIT
361 ITR 458 · 2014 · High Court
39
citing judgments

The selection of cases for scrutiny must be completed within the time prescribed by CBDT instructions. The department is bound by its own standards and cannot act with discrimination or selectively apply them.

CIT v. Ravi Kant Jain
250 ITR 141 · 2001 · High Court
34
citing judgments

Additions made as undisclosed income following a search and seizure cannot be sustained if there is no incriminating evidence found during the search to establish such undisclosed income. The purpose of section 158BC is to tax income detected as a result of a search.

CIT v. Attili N. Rao
252 ITR 880 · 2001 · Supreme Court
28
citing judgments

Capital gains are computed on the full price realized from the sale of an asset, even if certain dues are deducted from that price by a third party before payment to the assessee. Deductions for such dues are not permissible when calculating capital gains.

Judgments on Section 112

Rupesh Bishnoi, New Delhi vs. ITO, Ward- 2(2), Meerut

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

ITA 2483/DEL/2018[2014-15]Status: DisposedITAT Delhi20 Sept 2018AY 2014-15

Bench: Sh. N. K. Saini, Am & Ms. Suchitra Kamble, Jm Ita No. 2483/Del/2018 : Asstt. Year : 2014-15 Rupesh Bishnoi, Vs Income Tax Officer, C/O Kapil Goel, Adv., Ward-2(2), F-26/124, Sector-7, Rohini, Meerut Delhi-110085 (Appellant) (Respondent) Pan No. Afupb5240G Assessee By : Sh. Kapil Goel, Adv. Revenue By : Sh. Surender Pal, Sr. Dr Date Of Hearing : 17.09.2018 Date Of Pronouncement : 20.09.2018 Order Per N. K. Saini, Am: This Is An Appeal By The Assessee Against The Order Dated 13.02.2018 Of Ld. Cit(A), Meerut. 2. Following Grounds Have Been Raised In This Appeal: “1. That On The Facts & In The Circumstances Of The Case & In Law, Id Cit-A Erred In Sustaining The Action Of Id Ao In Applying Section 115Bbe Which Is Out Rightly Bad In Law. 2. That On The Facts & In The Circumstances Of The Case & In Law, Id Cit-A Erred In Not Allowing Rectification Application Filed U/S 154 By Assessee Which Was Wrongfully Rejected By Ld. Ao. 3. That On The Facts & In The Circumstances Of The Case & In Law, Id Cit-A Erred In Not Appreciating Surrender Of Exempt Ltcg Income U/S 10(38) Shall Be Subject Matter Of Section 112 Only & Cannot Be Lumped In Unexplained Income Provisions Which Are Not Applicable To Capital Gains Transaction. 4. That The Appellant Craves Leave To Add Add/Alter Any/All Grounds Of Appeal Before Or At The Time Of Hearing Of The Appeal.”

For Appellant: Sh. Kapil Goel, AdvFor Respondent: Sh. Surender Pal, Sr. DR
Section 10(38)Section 112Section 115BSection 154