Section 198 of the Income Tax Act

Income-tax Act, 2025: s.396

Section 198 of the Income-tax Act, 1961 corresponds to section 396 (Tax deducted is income received) of the Income-tax Act, 2025.

Read section 396 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 198 is CIT v. Calcutta Discount Co. Ltd. (39 ITR 706), cited in 103 of the 91 judgments on BharatTax that turn on this section.

Leading authorities on Section 198

CIT v. Calcutta Discount Co. Ltd.
39 ITR 706 · 1960 · High Court
103
citing judgments

The law does not oblige a trader to make maximum profit out of his trading transactions. Profits charged to tax must be in accordance with law and not amount to taxing notional income.

COMMISSIONER OF INCOME TAX v. VASISTH CHAY VYAAR LIMITED
90 Taxmann.com 365 · 2018 · Supreme Court
15
citing judgments

Interest income on Non-Performing Assets (NPA) need not be recognized on an accrual basis and the provisions of Section 145 of the Income Tax Act do not play a role in such income recognition. Furthermore, if interest does not result in any income, there can be no levy of tax.

Viswapriya Financial Services and Securities Ltd. v. CIT
258 ITR 496 · 2002 · High Court
9
citing judgments
Hyderabad Pharma Infrastructure & Technologies Ltd. v. ADIT(Intl. Taxn.)
45 Taxmann.com 339 · 2014 · Reported
8
citing judgments
131 ITD 205 (Chennai Trib.) 5. Pardeep Kumar Dhir v. ACIT
98 ITD 147 · 2006 · ITAT
8
citing judgments
Commissioner of Income Tax-II v. SAR Infracon P Ltd.
318 ITR 317 · 1996 · Reported
6
citing judgments
TC Leasing & Finance Ltd. 39 TW 211 (Raj. HC) Brahmaputra Capital & Financial Services Ltd. v. ITO
119 ITD 266 · 2009 · ITAT
4
citing judgments
Principal Commissioner of Income Tax v. M/s. West Bengal Housing Infrastructure
413 ITR 82 · High Court
4
citing judgments
Delhi Development Authority v. ITO
53 ITD 19 · 1995 · ITAT
4
citing judgments
413 ITR 82 (Calcutta) Pr CIT v. West Bengal Housing Infrastructure Development Corpn. Ltd SLP Dismissed
263 Taxmann 237 · Supreme Court
3
citing judgments

Judgments on Section 198

Associated Law Advisers, New Delhi vs. ACIT, New Delhi

In the result ITA number 1122/Del/2017 filed by the assessee for assessment year 2013 – 14 is allowed

ITA 1122/DEL/2017[2013-14]Status: DisposedITAT Delhi11 Sept 2019AY 2013-14

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishiassociated Law Advisers, Vs. Acit, Antriksh Bhawan, 6Th Floor, 22, Circle-63(1), Kasturba Gandhi Marg, New Delhi New Delhi Pan: Aaafa8774F (Appellant) (Respondent)

For Appellant: Shri C. S. Aggarwal, Sr. AdvFor Respondent: Shri Arun Kumar Yadav, Sr. DR
Section 143Section 145(1)Section 154Section 244ASection 40Section 43Section 43B

Uttar Pradesh Rajkiya Nirman Nigam Limited, Lucknow vs. Dy. Commissioner of Income Tax, Lucknow

In the result, the appeal of the assessee is allowed and the appeal of the Department is dismissed

ITA 317/LKW/2017[2010-11]Status: DisposedITAT Lucknow17 May 2019AY 2010-11

Bench: Shri. A. D. Jain & Shri T. S. Kapoorassessment Year: 2010-11 Uttar Pradesh Rajkiya Nirman V. Dcit Nigam Limited Range Vi Vishweshariya Bhawan Lucknow Vibhuti Khand, Gomti Nagar Lucknow Tan/Pan:Aaacu5701F (Appellant) (Respondent) Assessment Year: 2010-11 Dcit V. Uttar Pradesh Rajkiya Nirman Nigam Range Vi Limited Lucknow Vishweshariya Bhawan Vibhuti Khand, Gomti Nagar Lucknow Tan/Pan:Aaacu5701F (Appellant) (Respondent) Assessee By: Shri K. R. Rastogi, Fca Department By: Shri A. K. Bar, Cit (Dr) Date Of Hearing: 30 04 2019 Date Of Pronouncement: 17 05 2019 O R D E R Per A. D. Jain, V.P.: These Cross-Appeals Are Preferred By The Assessee As Well As The Revenue Against The Order Of The Ld. Cit(A)-Ii, Lucknow, Dated 10/3/2017 For The Assessment Year 2010-11. 2. The Sole Ground Of Appeal, Taken By The Assessee In Its Appeal In Ita No.314/Lkw/2017 Is, As Follows:-

For Appellant: Shri K. R. Rastogi, FCAFor Respondent: Shri A. K. Bar, CIT (DR)
Section 194CSection 198Section 40

Dy. Commissioner of Income Tax, Lucknow vs. M/S U.P Rajkiya Nirman Nigam Ltd., Lucknow

In the result, the appeal of the assessee is allowed and the appeal of the Department is dismissed

ITA 314/LKW/2017[2010-11]Status: DisposedITAT Lucknow17 May 2019AY 2010-11

Bench: Shri. A. D. Jain & Shri T. S. Kapoorassessment Year: 2010-11 Uttar Pradesh Rajkiya Nirman V. Dcit Nigam Limited Range Vi Vishweshariya Bhawan Lucknow Vibhuti Khand, Gomti Nagar Lucknow Tan/Pan:Aaacu5701F (Appellant) (Respondent) Assessment Year: 2010-11 Dcit V. Uttar Pradesh Rajkiya Nirman Nigam Range Vi Limited Lucknow Vishweshariya Bhawan Vibhuti Khand, Gomti Nagar Lucknow Tan/Pan:Aaacu5701F (Appellant) (Respondent) Assessee By: Shri K. R. Rastogi, Fca Department By: Shri A. K. Bar, Cit (Dr) Date Of Hearing: 30 04 2019 Date Of Pronouncement: 17 05 2019 O R D E R Per A. D. Jain, V.P.: These Cross-Appeals Are Preferred By The Assessee As Well As The Revenue Against The Order Of The Ld. Cit(A)-Ii, Lucknow, Dated 10/3/2017 For The Assessment Year 2010-11. 2. The Sole Ground Of Appeal, Taken By The Assessee In Its Appeal In Ita No.314/Lkw/2017 Is, As Follows:-

For Appellant: Shri K. R. Rastogi, FCAFor Respondent: Shri A. K. Bar, CIT (DR)
Section 194CSection 198Section 40

Director Of Income Tax international Taxation-ii New Delhi vs. M/s Gil Mauritius Holding Ltd

ITA/23/2014HC Uttarakhand02 May 2019
Section 190Section 191Section 201Section 208Section 210Section 234BSection 250(6)Section 260ASection 44

Bhav Vardhan Trust, Mumbai vs. ITO (E) 1(1), Mumbai

In the result, the appeal filed by the assessee is partly allowed in terms of our aforesaid observations

ITA 5578/MUM/2016[2008-09]Status: DisposedITAT Mumbai12 Sept 2018AY 2008-09

Bench: Shri G.S. Pannu & Shri Ravish Soodm/S. Bhav Vardhan Trust Income Tax Officer Nirmal Niketan (Exemption) 1(1) Vs. 2, Dr. Bhajekar Street Mumbai, Mumbai 400004 Pan – Aaatb3631Q Appellant Respondent Appellant By: Shri Rajesh P. Shah Respondent By: Shri Abdul Hakem M Date Of Hearing: 28.08.2018 Date Of Pronouncement: 12.09.2018 O R D E R Per Ravish Sood, Jm The Present Appeal Is Directed Against The Order Of The Cit(A)-1, Mumbai, Dated 23.06.2016, Which In Turn Arises From The Order Passed By The A.O Under Section 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As "The Act") Dated 02.12.2010 For A.Y. 2008-09. 2. The Assessee While Assailing The Order Of The Cit(A) Has Raised Before Us The Following Grounds Of Appeal: - “1. On The Facts & Under The Circumstances Of The Case & In Law, The Learned Commissioner Of Income Tax (Appeals) Erred In Confirming The Action Of Ao Of Considering The Tax Claim Of Rs.19,87,100/- As New Claim On The Ground That There Was No Claim Made By Appellant In The Return Of Income. 2. On The Facts & Under The Circumstances Of The Case & In Law, The Learned Commissioner Of Income Tax (Appeals) Erred Confirming The Action Of Ao Of Not Considering The Tax Expenses Of Rs. 19,87,100/- Incurred On The Object Of The Trust. The Ao Ought To Have Allowed The Same As It Is Allowable As Per Law.

For Appellant: Shri Rajesh P. ShahFor Respondent: Shri Abdul Hakem M
Section 11(1)Section 143Section 143(3)

ACIT, Cir-29, Kolkata vs. Smt Swagata Guha Mustafi, Kolkata

In the result, the appeal by the revenue and the cross-objection by the assessee are dismissed

ITA 1387/KOL/2015[2011-2012]Status: DisposedITAT Kolkata24 Aug 2018AY 2011-2012

Bench: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi] I.T.A. No. 1387/Kol/2015 Assessment Year: 2011-12 Asstt. Commissioner Of Income Tax, Circle-29, Kolkata....…….…………….…….……...Appellant Ayakar Bhawan Dakshin 2, Gariahat Road South Kolkata – 68

Section 198Section 250

Shri Parth Sarthi Naidu, Indore vs. The ITO 2(4), Indore

In the result, both appeals of the Revenue and Assessee i

ITA 251/IND/2017[2008-09]Status: DisposedITAT Indore18 Jul 2018AY 2008-09

Bench: Shri Kul Bharat & Shri Manish Boradassessment Year: 2008-09 Shri Parth Sarthi Naidu, Ito Prop. Kamakshi Transport 2(4) बनाम/ Comp. Indore Vs. C/O. B. Bansal & Co. E-2, Ratlam (Revenue) (Respondent) P.A. No.Aaopn4854B Assessment Year: 2008-09 Ito Shri Parth Sarthi Naidu, 2(4) Prop. Kamakshi Transport Comp. बनाम/ Indore C/O. B. Bansal & Co. Vs. E-2, Ratlam (Revenue) (Respondent) P.A. No. Aaopn4854B

Section 198

ITO, Ward - 28(1), Kolkata vs. Shri Diptendra Nath Ganguly, Kolkata

In the result, the appeal filed by the Revenue is dismissed

ITA 2413/KOL/2016[2008-09]Status: DisposedITAT Kolkata06 Jun 2018AY 2008-09

Bench: Shri A. T. Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.2413/Kol/2016 ("नधा"रणवष" / Assessment Year: 2008-09) Ito, Ward-28(1), Kolkata Vs. Shri Diptendra Nath Ganguly M/S. Techcreate India, 110/18A, Aayakar Bhawan Dakhin, 2, Gariahat Selimpur Road, Kolkata – 700031. Road (South), Kol-68. "थायीलेखासं./जीआइआरसं./Pan/Gir No. :Afdpg 7982 D (Appellant) .. (Respondent)

For Appellant: Shri Soumyajit Dasgupta, Addl. CIT(Sr. DR)For Respondent: Shri Pinaki Maji, ACA & Sri Anjan Kr. Maiti, FCA
Section 133(6)Section 143(3)Section 147Section 40

Deputy Commissioner of Income-Tax vs. M/S. Skoda Auto A.S., Aurangabad

In the result, appeal of Revenue is dismissed

ITA 787/PUN/2015[2010-11]Status: DisposedITAT Pune25 May 2018AY 2010-11

Bench: Ms. Sushma Chowla, Jm & Shri Anil Chaturvedi, Am आयकर अपीऱ सं. / Ita No.787/Pun/2015 यििाारण वषा / Assessment Year : 2010-11

For Appellant: Ms. Divya Bajpai, CITFor Respondent: S/Shri Nikhil Pathak &
Section 10Section 143(3)

The ITO, Ward-10(1), Ahmedabad vs. M/S. Aashirwad Clearing Agency, Ahmedabad

In the result, both the appeals are dismissed

ITA 1284/AHD/2013[2009-10]Status: DisposedITAT Ahmedabad11 May 2018AY 2009-10
For Appellant: “The ld. CIT(A) has erred in law and on fact in confirming addition of Rs.7,66,7
Section 143(3)Section 198

M/S. Aashirwad Clearing Agency, Ahmedabad vs. The Income Tax Officer, Ward-10(1), Ahmedabad

In the result, both the appeals are dismissed

ITA 1174/AHD/2013[2009-10]Status: DisposedITAT Ahmedabad11 May 2018AY 2009-10
For Appellant: “The ld. CIT(A) has erred in law and on fact in confirming addition of Rs.7,66,7
Section 143(3)Section 198

Surendra S. Gupta, Mumbai vs. Addl CIT 24(3), Mumbai

Appeal stand partly allowed in terms of our above order

ITA 5791/MUM/2014[2010-11]Status: DisposedITAT Mumbai09 May 2018AY 2010-11

Bench: Shri Joginder Singh, Jm & Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./I.T.A. No.5791/Mum/2014 (िनधा"रणवष" / Assessment Year: 2010-11) Surendra S. Gupta Additional Commissioner Of 102-106, ‘A’ Wing Income Tax 24(3) बनाम/ Zaitoon Apartments,182 C-11, Pratyakshkar Bhawan Vs. S.V.Road,Goregaon (W) B.K.C, Bandra (East) Mumbai-400 062 Mumbai -400 051 "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aabpg-5931-H (अपीलाथ"/Appellant) (""थ" / Respondent) :

For Appellant: M.Subramaniyam,Ld. ARFor Respondent: M.V.Rajguru, Ld. DR
Section 143(3)Section 50C

Bhav Vardhan Trust, Mumbai vs. ITO (E) 1(1), Mumbai

In the result, appeal of the assessee is allowed for statistical purposes in terms of our aforesaid observations

ITA 6571/MUM/2017[2012-13]Status: DisposedITAT Mumbai11 Apr 2018AY 2012-13

Bench: Shri G.S. Pannu, Am & Shri Ravish Sood, Jm Bhav Vardhan Trust, Vs. Ito, (Exemptions)-1(1), Nirmal Niketan, 2, Mumbai. Dr. Bhajekar Street, Mumbai – 400 004 Pan No. Aaatb 3631 Q (Appellant) (Respondent)

For Appellant: Shri Rajesh P. Shah, CAFor Respondent: Ms. N. Hemalatha, Sr. DR
Section 11(1)Section 11(1)(a)Section 12ASection 139Section 143(2)Section 143(3)

Shri. Kanthula Ravishankar, Bangalore vs. Assistant Commissioner of Income-Tax, Bangalore

In the result, the assessee’s appeal for asst

ITA 1897/BANG/2016[2012-13]Status: DisposedITAT Bangalore19 Jan 2018AY 2012-13

Bench: Shri Sunil Kumar Yadav & Shri Jason P Boazkanthula Ravishanker, ‘Ravshan’ No.7, Bruton Road, Bangalore. . Appellant Vs. The Asst. Commissioner Of Income-Tax, Circle-2(3)(1), Bangalore . Respondent Appellant By : Shri A.C Raju, C.A Respondent By : Shri B.R Ramesh, Cit Date Of Hearing : 03-1-2018 Date Of Pronouncement : 19-1-2018 O R D E R Per Shri Jason P Boaz: This Appeal By The Assessee Is Directed Against The Order Of The Commissioner Of Income-Tax (Appeals) – 7, Bangalore Dated 30/8/2016 For Asst. Year 2012-13. 2. Briefly Stated, The Facts Of The Case Are As Under:- 2.1 The Assessee, Prop. K.K Corporation, Engaged In Business As Selling Agents For M/S Raymonal Ltd., Products For The States Of Ita No.1897/B/16 2

For Appellant: Shri A.C Raju, C.AFor Respondent: Shri B.R Ramesh, CIT
Section 143(3)Section 192Section 198Section 199

Chandra Shekhar Aggarwal, New Delhi vs. ACIT, New Delhi

Appeal of the assessee is allowed

ITA 3178/DEL/2016[2012-13]Status: DisposedITAT Delhi07 Nov 2017AY 2012-13

Bench: Shri N. K. Saini & Ms Suchitra Kamblechandra Shekhar Aggarwal Vs Acit R-159, Circle-61(1) New Rajinder Nagar New Delhi New Delhi Aacpa6665M (Respondent) (Appellant)

Section 142(1)Section 143(2)Section 199Section 234BSection 234CSection 244

DCIT, New Delhi vs. M/S. Ge Capital Business Process Management Services Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 6836/DEL/2014[2010-11]Status: DisposedITAT Delhi05 Oct 2017AY 2010-11

Bench: : Shri H.S. Sidhu & Shri L.P. Sahu

Section 198Section 37Section 92C

ACIT, New Delhi vs. M/S. A & A Earthmovers Pvt. Ltd., New Delhi

In the result the appeal filed by the revenue is dismissed

ITA 237/DEL/2015[2010-11]Status: DisposedITAT Delhi29 Sept 2017AY 2010-11

Bench: Shri R. K. Panda & Ms. Suchitra Kambleassessment Year : 2010-11

For Appellant: Shri Somil Agarwal, AdvFor Respondent: Shri R.C.Dandey, Sr. DR
Section 10(34)Section 14ASection 14A(2)Section 198

M/S Trinetra Buildcon Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, the appeal of the assessee is dismissed

ITA 5568/DEL/2016[2012-13]Status: DisposedITAT Delhi27 Apr 2017AY 2012-13

Bench: Shri B.P. Jain

For Respondent: Ms. Bedobani Chaudhuri
Section 143(1)Section 143(2)Section 43(1)Section 5Section 9

DCIT, New Delhi vs. M/S. Lottee Engineering and Construction India Pvt. Ltd., New Delhi

In the result appeal filed by revenue stands dismissed

ITA 1408/DEL/2014[2010-11]Status: DisposedITAT Delhi17 Mar 2017AY 2010-11

Bench: Sh. P. K. Bansal & Smt. Beena A. Pillaidcit Lottee Engineering & Construction Circle-4(1) India Pvt. Ltd. Vs. New Delhi 511, Kailash Building, K. G. Marg New Delhi Pan : Aabcl3818P (Appellant) (Respondent)

For Appellant: Sh. Umesh Chand Dubey, Sr.DRFor Respondent: Ms. Ananya Kapoor
Section 198

Dhule Palesner Tollway Ltd, Mumbai vs. ITO 15(1)(4), Mumbai

In the result, appeal of the assessee is dismissed

ITA 2880/MUM/2015[2011-12]Status: DisposedITAT Mumbai28 Feb 2017AY 2011-12

Bench: Shri D. Karunakara Rao & Shri Pawan Singhdhule Palesner Tollway Limited, फनाभ/ Income Tax Officer- 10Th Floor, B-Wing, Hincon 15(1)(4),[Erstwhile Ito Vs. House, Lbs Marg, Vikhroli (W), 10(3)(1)], Mumbai – 400083. R.No. 456 & 459, Aayakar Bhavan, Mk Road, Mumbai – 400 020. स्थामी रेखा सं./ Pan : Aadcd1212H (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) अऩीराथी की ओय से / Appellant By : None प्रत्मथी की ओय से/ Respondent By : Shri Sambit Mishra

For Appellant: NoneFor Respondent: Shri Sambit Mishra
Section 143(3)(ii)Section 198