Section 28 of the Income Tax Act

Income-tax Act, 2025: s.26

Section 28 of the Income-tax Act, 1961 corresponds to section 26 (Income under head “Profits and gains of business or profession") of the Income-tax Act, 2025.

Read section 26 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 28 is CIT v. Tata Elxsi Ltd. (349 ITR 98), cited in 818 of the 1,686 judgments on BharatTax that turn on this section.

Leading authorities on Section 28

CIT v. Tata Elxsi Ltd.
349 ITR 98 · 2012 · High Court
818
citing judgments

When computing deduction under Section 10A, if communication or telecommunication expenses are excluded from export turnover, they must also be excluded from total turnover to maintain consistency and apply the ordinary meaning of 'turnover' in context.

CIT v. Vinay Cements Ltd.
213 CTR 268 · 2007 · Supreme Court
422
citing judgments

Employees' contributions to provident fund and ESI are allowable as a deduction under Section 36(1)(va) read with Section 2(24)(x) if deposited by the assessee before the due date for filing the income tax return.

Brooke Bond India Ltd. v. CIT
225 ITR 798 · 1997 · Supreme Court
228
citing judgments

Expenditure incurred for increasing a company's share capital or expanding its capital base, such as expenses related to the issue of shares, constitutes capital expenditure. Such expenses are not deductible as revenue expenditure under Section 37(1) of the Income-tax Act, 1961, even if they incidentally benefit the business.

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.

Badridas Daga v. CIT
34 ITR 10 · 1958 · Supreme Court
181
citing judgments

A loss incurred by a businessman, such as money lost or advances written off, if it arises in the ordinary course of business, is a deductible trading loss. Such a loss is allowable as it is inherent or incidental to the business operations.

Mahender Pal Narang v. CBDT
161 Taxmann.com 301 · 2024 · High Court
178
citing judgments

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).

Lissie Medical Institutions v. CIT
348 ITR 344 · 2012 · High Court
164
citing judgments

The Kerala High Court held that charitable institutions claiming exemption under Section 11 are not entitled to claim depreciation on assets used for charitable purposes, taking a view contrary to most other High Courts.

CIT v. Ganpat Ram Bisnoi
296 ITR 292 · 2008 · High Court
145
citing judgments

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.

Movaliya Bhikhubhai Balabhai v. ITO TDS
388 ITR 343 · 2016 · High Court
128
citing judgments

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.

Topman Exports v. CIT
342 ITR 49 · 2012 · Supreme Court
121
citing judgments

Export incentives, such as DEPB (Duty Entitlement Pass Book) and advance license benefits, constitute income taxable on an accrual basis under Section 28 of the Income-tax Act. Profit arising on the transfer of DEPB is not eligible for deduction under Section 80HHC.

Judgments on Section 28

Sandeep, Sonipat vs. Income Tax Officer Ward-1, Sonipat

In the result, the appeal filed by the assessee is allowed

ITA 2392/DEL/2026[2014-15]Status: DisposedITAT Delhi18 Sept 2026AY 2014-15

Bench: Shri S.Rifaur Rahmansandeep, Vs. Ito, Ward 1, Village Badhkhalsa, Sonipat. Ps Rai, Sonipat – 131 001 (Haryana). (Pan : Ajmpr1910R) (Appellant) (Respondent) Assessee By : Shri Subodh Jain, Advocate Shri Samyak Jain, Ca Revenue By : Shri Manoj Kumar, Sr. Dr Date Of Hearing : 14.07.2026 Date Of Pronouncement : 18.09.2026 O R D E R Per S.Rifaur Rahman,Am: 1. This Appeal Is Filed By The Assessee Against The Order Passed By The Ld. Commissioner Of Income-Tax (Appeals)/National Faceless Appeal Centre, Delhi [For Short ‘Ld. Cit (A)] Dated 08.01.2026 For The Assessment Year 2014-15. 2. Brief Facts Of The Case Are, Assessee Has Not Filed Its Return Of Income. Based On The Above, Assessment Was Reopened. Based On The Information Available On Aims Module, The Assessee Has Received Cash Of 2 Rs.35,33,013/- On Account Of Interest Under Section 194A Of The Income- Tax Act, 1961 (For Short ‘The Act’). Accordingly Notice Under Section 148 Was Issued & Served On The Assessee. Subsequently, Assessee Filed Its Return Of Income As Required Under Section 148 Of The Act On 30.10.2021 Electronically Declaring Total Income Of Rs.1,03,687/-. Accordingly Notices Under Section 143(2) & 142(1) Were Issued & Served On The Assessee. During Assessment Proceedings, Ao Observed That Assessee Has Received Enhanced Interest Income From Land Acquisition Officer Of An Amount Of Rs.36,33,013/- On Which Tds Under Section 194A Was Deducted. He Observed That Assessee Has Claimed The Same As Exempt Income In Its Return Of Income. When The Details Were Called For, Assessee Has Submitted As Under:

For Appellant: Shri Subodh Jain, AdvocateFor Respondent: Shri Manoj Kumar, Sr. DR
Section 10(37)Section 143(2)Section 147Section 148Section 194ASection 250Section 28Section 34