Section 46A of the Income Tax Act

Income-tax Act, 2025: s.69

Section 46A of the Income-tax Act, 1961 corresponds to section 69 (Capital gains on purchase by company of its own shares or other specified securities) of the Income-tax Act, 2025.

Read section 69 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 46A is CIT v. MAF Academy (P) Ltd. (361 ITR 258), cited in 132 of the 520 judgments on BharatTax that turn on this section.

Leading authorities on Section 46A

CIT v. MAF Academy (P) Ltd.
361 ITR 258 · 2014 · High Court
132
citing judgments

Amounts received from bogus share transactions, where a private limited company sells shares to unrelated parties at a huge premium and then repurchases them at a loss shortly after, are taxable as unexplained cash credits under Section 68. The onus to prove identity, creditworthiness, and genuineness of such transactions lies solely on the assessee.

CIT v. D. Ananda Basappa
309 ITR 329 · 2009 · High Court
97
citing judgments

For exemption under Section 54, the expression 'a residential house' allows for investment in multiple residential units that form one functional unit, as 'a' does not imply a singular number. The amendment to Section 54, effective from April 1, 2015, is prospective.

CIT v. Virgin Securities & Credits (P) Ltd.
332 ITR 396 · 2011 · High Court
85
citing judgments

The Commissioner of Income-tax (Appeals) must admit additional evidence if it is crucial for the proper disposal of the appeal, ensuring substantial justice to the appellant.

CIT v. Gita Duggal
357 ITR 153 · 2013 · High Court
77
citing judgments

For capital gains exemption under sections 54 and 54F, the term "a residential house" does not restrict the exemption to a single residential unit and can include multiple contiguous or combined residential units treated as one house.

Shankar Khandasari Sugar Mills v. CIT
193 ITR 669 · 1992 · High Court
64
citing judgments

Best judgment assessments under Section 144 must be a fair and rational estimation of income by the Assessing Officer, not capricious or arbitrary. Appellate authorities should accept clarificatory evidence to test the fairness of such assessments, even if produced for the first time.

Raja Bahadur Kamakhya Narain Singh v. CIT
77 ITR 253 · 1970 · Supreme Court
49
citing judgments

The Supreme Court clarifies the distinction between income chargeable as capital gains and income taxable as business profits, guiding the assessment of whether a transaction constitutes a transfer of a capital asset or is in the nature of trade.

CIT v. Glaxo Smithkline Asia (P.) Ltd.
195 Taxmann 35 · 2010 · Supreme Court
46
citing judgments

The Supreme Court may dismiss an appeal challenging the allocation of intra-group cross-charges if the entire transaction is found to be revenue neutral for the relevant assessment year.

CIT v. Gumanmal Jain
394 ITR 666 · 2017 · High Court
46
citing judgments

Multiple floors or houses can qualify as 'a residential house' for capital gains exemption under Sections 54 and 54F if they are constructed or capable of being used as a single unit. This applies to assessment years where the unamended law used the term 'a residential house'.

PCIT v. NDR Promoters
102 Taxmann.com 182 · 2019 · High Court
27
citing judgments

Additions under Section 68 for share capital received from companies managed by one person are justified when the Assessing Officer establishes this fact. The Supreme Court has upheld this view.

CIT v. V.S. Dempo & Co. Pvt. Ltd.
336 ITR 209 · 2011 · High Court
27
citing judgments

Disallowance under Section 40A(2)(b) is not maintainable when both the payer and payee are assessed at the maximum marginal rate, as it results in a revenue-neutral situation.

Judgments on Section 46A

Assistant Commissioner of Income-Tax, Circle-2(1)(1), Ahmedabad vs. H V Infratex Ltd, Ahmedabad

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

ITA 1034/AHD/2023[2016-2017]Status: DisposedITAT Ahmedabad06 Feb 2025AY 2016-2017

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.1034/Ahd/2023 िनधा"रण वष" /Assessment Year : 2016-17 Assistant Cit H.V. Infratex Ltd. बनाम/ Circle-2(1)(1) 202, Parth Milan Complex V/S. Ahmedabad Nr. Hotel Nest,Navrangpura Ahmedabad – 380 009 (Gujarat) "थायी लेखा सं./Pan: Aabch 6794 C (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee By : Shri Prakash D. Shah, Ar Revenue By : Shri Rignesh Das, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 30 /01/2025 घोषणा की तारीख /Date Of Pronouncement: 06/02/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am: This Appeal Filed By The Revenue Is Directed Against The Order Of The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As “Cit(A)”] Dated 30.10.2023, Arising Out Of The Assessment Order Dated 10/12/2018 Passed Under Section 144 Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act”] By The Assistant Commissioner Of Income Tax, Circle 2(1)(1), Ahmedabad [Hereinafter Referred To As “Ao”] For The Assessment Year (Ay) 2016-17. The Asstt. Cit Vs. H.V. Infratex Ltd. Asst. Year : 2016-17

For Appellant: Shri Prakash D. Shah, ARFor Respondent: Shri Rignesh Das, Sr.DR
Section 115JSection 144Section 250(4)Section 37Section 46A