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

M/S. Lucky Exports, New Delhi vs. DCIT, New Delhi

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

ITA 771/DEL/2014[2008-09]Status: DisposedITAT Delhi28 Sept 2020AY 2008-09

Bench: Shri R.K. Panda & Shri Kuldip Singhassessment Year: 2008-09 Lucky Exports, Vs Dcit, Ug-28, Som Dutt Chambers-Ii, Circle-24(1), 9, Bhikaji Cama Place, New Delhi. New Delhi. Pan: Aaafl1147P (Appellant) (Respondent) Assessee By : Shri Naveen N.D. Gupta, Ca Revenue By : Shri Saras Kumar, Sr. Dr Date Of Hearing : 20.08.2020 Date Of Pronouncement : 28.09.2020 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 21.11.2013 Of The Cit(A)-28, New Delhi Relating To Assessment Year 2008-09. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Partnership Firm & Is Engaged In The Business As Merchant Exporter. It Filed Its Return Of Income On 27Th September, 2008 Declaring The Total Income At Rs.2,96,21,168/-. During The Course Of Assessment Proceedings, The Ao Observed From The Profit & Loss Account That The Assessee Has Claimed A Sum Of Rs.1,61,35,879/- Under The Head ‘Write Off/Bad Debt.’ He, Therefore, Asked The Assessee To Explain & Justify The Advances /Bad Debt Written Off In Respect Of 22 Parties. He Asked The Assessee To File Partywise Explanation & Justification Of Bad Debt/Advances Written Off & To Produce The Copy Of Account & Names Of Such Parties For The Last Three Years. He Also Asked The Assessee To File: (A) Copy Of Bank Statement When Payment Of Advances Written Off Were Made; (B) Complete Name, Address, Pan & Contact Details Of The Parties Including Current Address, If Any; & (C) Copy Of Correspondence Made In Connection With Recovery Of Loan/Advances Written Off.

For Appellant: Shri Naveen N.D. Gupta, CAFor Respondent: Shri Saras Kumar, Sr. DR
Section 37Section 37(1)

Bhaguram Pandurang Komatwad, Latur vs. Income-Tax Officer, Ward - 1, Latur

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

ITA 1723/PUN/2017[2012-13]Status: DisposedITAT Pune26 Jun 2020AY 2012-13

Bench: Shri D. Karunakara Rao, Am & Shri S. S. Viswanethra Ravi, Jm आयकर अपील सं. / Ita No.1723/Pun/2017 िनधा"रण वष" / Assessment Year : 2012-13 Bhaguram Pandurang Komatwad, At Post Harangal (Bk), Taluka & Dist. Latur-413531. .......अपीलाथ" / Appellant Pan : Ahppk5689R बनाम / V/S. Ito, Ward-1, ……""यथ" / Respondent Latur. Assessee By : Shri Sharad Shah Revenue By : Shri S. P. Walimbe सुनवाई क" तारीख / Date Of Hearing : 04.03.2020 घोषणा क" तारीख / Date Of Pronouncement : 26.06.2020 आदेश / Order Per D. Karunakara Rao, Am: This Appeal Is Filed By The Assessee Against The Order Of Cit(A)-2, Aurangabad Dated 01.05.2017 For The Assessment Year 2012-13. 2. The Grounds Raised By The Assessee Are As Under :- “1) The Ld. Ao Erred In Treating The Amount Of Rs.3,10,33,961/- Received By Me U/S 28 Of Land Acquisition Act 1984, As Interest Instead Of Part & Parcel Of Consideration. 1.1) As The Prime Asset Does Not Fall Under The Category Of Capital Asset, The Ld. Ao (As Well As Ld. Cit(A)) Ought Not To Have Levied Tax On Amount Received By Me U/S 28 Of Land Acquisition Act 1984. 2) The Ld Ao Erred (Ld Cit(A) Erred In Confirming) In Taxing The Income Which Was Effectively Not Received By The Me. 3) The Assessee Craves The Liberty To Add, Alter Or Amend Any Of The Grounds Of Appeal Or To Take Any Fresh Ground Of Appeal At The Time Of Hearing.” The Core Issue Relates To The Taxation Of The Sum Of Rs.3,10,33,961/-.

For Appellant: Shri Sharad ShahFor Respondent: Shri S. P. Walimbe
Section 23Section 28Section 34Section 57