Section 48 of the Income Tax Act

Income-tax Act, 2025: s.72

Section 48 of the Income-tax Act, 1961 corresponds to section 72 (Mode of computation of capital gains) of the Income-tax Act, 2025.

Read section 72 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 48 is CIT v. Walfort Share & Stock Brokers (P.) Ltd. (326 ITR 1), cited in 543 of the 1,457 judgments on BharatTax that turn on this section.

Leading authorities on Section 48

CIT v. Walfort Share & Stock Brokers (P.) Ltd.
326 ITR 1 · 2010 · Supreme Court
543
citing judgments

For attracting Section 14A disallowance, there must be a proximate cause relating the expenditure to actual tax-exempt income, and such disallowance is not automatic but requires positive material. Additionally, Section 94(7) on dividend stripping only ignores losses to the extent of dividend received for assessment years post-April 1, 2002, allowing the remaining loss.

Escorts Ltd. v. UOI
199 ITR 43 · 1993 · Supreme Court
267
citing judgments

A statute should not be construed to permit double deduction for the same expenditure unless specifically provided by law.

E.D. Sassoon & Co. Ltd. v. CIT
26 ITR 27 · 1954 · Supreme Court
256
citing judgments

Income is taxable only when it represents real income, not notional income. It accrues only when there is a vested right to receive it, typically upon the occurrence of a transfer or event, rather than merely on a time basis.

CIT v. Balbir Singh Maini
398 ITR 531 · 2017 · Supreme Court
228
citing judgments

A transfer of immovable property, for the purpose of capital gains under section 2(47)(v) of the Income-tax Act, occurs only when the agreement allowing possession in part performance of a contract is a registered instrument, as mandated by Section 53A of the Transfer of Property Act.

Gramaphone Co. of India Ltd. v. Birendra Bahadur Pandey
132 Taxmann 373 · 2003 · Supreme Court
146
citing judgments
CIT v. D.P. Sandhu & Bros.
273 ITR 1 · 2005 · Supreme Court
140
citing judgments

Surrender of tenancy rights is a transfer of a capital asset, and the consideration received is a capital receipt subject to capital gains tax. If the cost of acquisition cannot be determined, the transfer of such an asset was not taxable under capital gains prior to the amendment of Section 55(2) in 1995.

Morvi Industries Ltd. v. CIT
82 ITR 835 · 1971 · Supreme Court
136
citing judgments

Income accrues when it becomes due, vesting the assessee with the right to claim the amount, even if payment is not immediate. It requires a corresponding liability from the other party to pay, emphasizing real rather than hypothetical accrual, particularly for assessees using the mercantile system of accounting.

Nirma Industries Ltd. v. DCIT
283 ITR 402 · 2006 · High Court
136
citing judgments

Interest received on delayed payments for sales is considered part of the sale proceeds and is eligible for deduction under Section 80-IA as business income.

CIT v. Manjula J. Shah
355 ITR 474 · 2013 · High Court
113
citing judgments

For capital assets acquired by gift or will, the indexed cost of acquisition under Section 48 is computed with reference to the year the previous owner first held the asset. The period of holding for determining if an asset is long-term also includes the previous owner's holding period, as per Section 2(42A).

Indian Express 498 Newspapers (Bombay) (P) Ltd. v. Union of India
1 SCC 641 · 1985 · Reported
109
citing judgments

The Supreme Court examined the validity of customs duty on newsprint in the context of Article 19(1)(a), emphasizing that the press advances public interest by publishing facts and opinions crucial for a democratic country.

Judgments on Section 48

Ms. Uma Gupta, New Delhi vs. ACIT, New Delhi

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 3818/DEL/2016[2006-07]Status: DisposedITAT Delhi05 Oct 2021AY 2006-07

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastavaassessment Year: 2006-07 Uma Gupta, Vs. Acit, Aerens Bimaldeep Complex, Central Circle-9, Behind Pocket-3, Vasant Kunj, New Delhi. New Delhi. Pan: Aahpg0455E (Appellant) (Respondent) Assessee By : Shri Rajeshwar Painuly, Ca Revenue By : Shri Ajay Kumar, Sr. Dr Date Of Hearing : 05.10.2021 Date Of Pronouncement : 05.10.2021 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Ex Parte Order Dated 23Rd March, 2016 Of The Cit(A)-25, Delhi, Relating To Assessment Year 2006-07. 2. Facts Of The Case, In Brief, Are That A Search & Seizure & Survey Operation U/S 132/133A Of The It Act, 1961 Were Conducted On 17Th August, 2011 In The Case Of The Assessee Along With Other Cases Of The Group At Various Residential & Business Premises. In Response To Notice U/S 153A, The Assessee Filed The Return Of Income Declaring Income From House Property At Rs.1,26,000/-, Income From Bank Interest At Rs.241/- & Income From Dividend At Rs.53,050/-. During The Course Of Assessment Proceedings, The Ao Observed That The Assessee Has Declared Capital Loss On Sale Of Property At Rs.32,536/- Giving Note That The Indexed Cost Of The Property Is More By An Amount Of Rs.32,536/- Than The Sale Consideration Of The Land. However, In The Balance Sheet, The Assessee Has Credited A Sum Of Rs.80,032.67 As Profit On Sale Of Land. In Absence Of Any Proper Explanation From The Side Of The Assessee, The Ao Treated The Long-Term Capital Gain At Rs.80,032.67 & Determined The Total Income Of The Assessee At Rs.1,71,997/-, After Allowing Deduction U/S 80C At Rs.34,276/- & Allowing The Exemption U/S 10(34) Of The Act On Dividend Income At Rs.53,050/-.

For Appellant: Shri Rajeshwar Painuly, CAFor Respondent: Shri Ajay Kumar, Sr. DR
Section 10(34)Section 132Section 153ASection 234BSection 48Section 80C