Section 145A of the Income Tax Act
Income-tax Act, 2025: s.277
Section 145A of the Income-tax Act, 1961 corresponds to section 277 (Method of accounting in certain cases) of the Income-tax Act, 2025.
Read section 277 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 145A is CIT v. State Bank of Bikaner & Jaipur (43 Taxmann.com 411), cited in 524 of the 656 judgments on BharatTax that turn on this section.
Leading authorities on Section 145A
Employee contributions to provident fund, ESI, and other welfare funds, if deposited by the due date for furnishing the return of income under Section 139(1), are allowable as a deduction and cannot be disallowed under Section 36(1)(va) read with Section 2(24)(x) or Section 43B, even if deposited after the due date prescribed by the respective welfare Acts.
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.
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.
An order by the Supreme Court dismissing a Special Leave Petition (SLP) at the threshold without detailed reasons does not constitute a declaration of law or a binding precedent. Such dismissal in limine offers no legal assistance.
Interest received as enhanced compensation under Section 28 of the Land Acquisition Act, 1894, for compulsory acquisition of land is taxable as "income from other sources" under Sections 56(2)(viii) and 57(iv) of the Income-tax Act, 1961, and is not exempt under Section 10(37).
The Principal Commissioner of Income Tax cannot exercise revisional jurisdiction under Section 263 if the Assessing Officer has taken one of two possible views on a debatable issue during assessment proceedings.
An assessment order cannot be revised under Section 263 for being erroneous due to a perceived lack of enquiry if the Assessing Officer has already conducted an enquiry, applied their mind, and accepted the assessee's explanation.
Interest paid on compensation or enhanced compensation for compulsory acquisition of land forms part of the compensation itself and is not taxable as interest income under section 56(2)(viii) or section 145A.
Interest received under Section 28 of the Land Acquisition Act, 1894, on enhanced compensation does not form part of the compensation itself but is taxable as 'income from other sources', analogous to interest under Section 34 of the Act.
Interest received under Sections 28 and 34 of the Land Acquisition Act, 1894, for delayed or enhanced compensation, is a revenue receipt and is taxable under the Income Tax Act.
