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

Rajesh Shriram Kasat, Pune vs. Additional Commissioner of Income-Tax

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

ITA 516/PUN/2016[2005-06]Status: DisposedITAT Pune27 Apr 2022AY 2005-06

Bench: Shri Satbeer Singh Godara, Jm & Dr. Dipak P. Ripote, Am आयकरअपीलसं. / Ita No.516/Pun/2016 िनधा"रणवष" / Assessment Year : 2005-06 Shri Rajesh Shriram Kasat, The Additional Commissioner Of Pratham Bungalow, Vs Income Tax, Range-3, Pune. 37/7, Prabhat Road, Pune – 411 004. Pan: Aeapk 3449 M Appellant/ Revenue Respondent/ Assessee Assessee By Shri S.U.Pathak – Ar Revenue By Shri S P Walimbe - Dr Date Of Hearing 25/04/2022 Date Of Pronouncement 27/04/2022 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By The Assessee Directed Against The Order Of Ld.Commissioner Of Income Tax(Appeals)-1, Pune Dated 04.02.2016For The Assessment Year 2005-06. The Assessee Raised The Following Grounds Of Appeal: “1] The Learned Cit(A) Erred In Holding That The Business Loss Of Rs.29,44,160/- Incurred By The Appellant On Purchase & Sale Of Guargum Is A Speculation Loss & It Cannot Be Set Off Against The Business Profit Of The Appellant. 2] The Learned Cit(A) Failed To Appreciate That – A.The Appellant Had Paid For The Purchase Of Guargum Through Banking Channel & Therefore, Transaction Of Purchase Was A Genuine Transaction. B. The Appellant Had Taken Delivery Of The Stock Purchased As The Appellant Had Shown The Proof For Payment Of Godown Rent. C. The Purchases & Sales Were Effected Through The Commission Agent M/S.Anilkumar Manishkumar, Jodhpur.