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

M/S. Alang Metal Exim Pvt. Limited., Bhavnagar vs. ACIT, Circle-1, Bhavnagar

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

ITA 2329/AHD/2018[2012-13]Status: DisposedITAT Ahmedabad19 Jun 2024AY 2012-13

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar, Accountnat Member Assessment Year : 2012-13 M/S.Alang Metal Exim Pvt.Ltd. The Acit Shop No.3, Arpan Flat Vs Circle-1 Shishuvihar Circle, Bhavnagar Bhavnagar – 364 001 (Gujarat) Pan:Aaeca 9651 Q ….. अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Tushar Hemani, Sr.Adv. & Shri Parimalsinh B. Parmar, Ar Revenue By : Shri Sudhendu Das, Cit-Dr सुनवाई क" तार"ख/Date Of Hearing : 13 /06/2024 घोषणा क" तार"ख /Date Of Pronouncement: 19/06/2024 आदेश/O R D E R Per Makarand V. Mahadeokarthis Appeal Is Filed By The Assessee Against The Order Dated 20-9-2018 Passed By The Ld.Commissioner Of Income Tax (Appeals)–6, Ahmedabad [Hereinafter Referred To As “The Ld.Cit(A)”] In Confirming The Addition Of Rs.7,00,00,000/- Under Section 68 Of The Income Tax Act, 1961 (Hereinafter Referred To As “The Act”) & Disallowance Of Rs.3,30,000/- Out Of Loading & Unloading Charges Made By The Assessing Officer (Hereinafter Referred To As “Ao”) In His Assessment Order Passed Under Section 143(3) Of The Act For The Assessment Year (Ay) 2012-13. M/S.Alang Metal Exim Pvt.Ltd. Vs. Acit Asst. Year : 2012-13

For Appellant: Shri Tushar Hemani, Sr.Adv. &For Respondent: Shri Sudhendu Das, CIT-DR
Section 143(3)Section 68