RNM Tax Alert – Direct Tax Part for June 2026
1. NOTIFICATION S.O. 3609(E) [NO. 74/2026/F.NO. 275/16/2026-IT(B)], DATED 3-
7-2026
The CBDT vide notification dated 3 rd July, 2026, exempts TDS on aircraft and ship
lease payments to IFSC units.
2. ORDER F. NO. 225/73/2025-ITA-II, DATED 8-7-2026
The CBDT authorised the DGIT (Systems) to upload information received under
AEOI to the Annual Information Statement (AIS).
3. NOTIFICATION S.O. 3889(E) [F. NO. 85/2026/F.NO.370149/112/2026-TPL],
DATED 15-7-2026
The CBDT notifies ‘384’ as Cost Inflation Index for Financial Year 2026-27.
4. NOTIFICATION G.S.R. 656(E) [NO. 97/2026/F. NO. 370142/11/2026-TPL],
DATED 24-7-2026
The CBDT notifies ITR-BN for block assessment under the Income-tax Act, 2025.
5. CBDT issues Guidance Note on Crypto-Asset Reporting Obligations under
Income-tax Act, 2025
The CBDT has released Guidance Note that explains the reporting obligations of
Reporting Crypto-Asset Service Providers (RCASPs) under section 509, Rules 241
to 244 and Form 167. It provides practical guidance on due diligence, reporting
procedures and compliance, and includes detailed FAQs aligned with the OECD's
Crypto-Asset Reporting Framework (CARF).
Important Judicial Precedents
Part-A. Domestic Tax – Case Law
1. SLP dismissed: sec.153C proceedings invalid absent incriminating material
found during third-party search linking assessee.
[2026] 188 taxmann.com 640 (SC) Assistant Commissioner of Income-tax v.
Maulik Jayantilal Patel
SLP dismissed against impugned order of High Court that where no incriminating
material relating to assessees was found during search on a third party and
RNM Tax Alert – Direct Tax Part for June 2026
Branch Offices: 613, Suncity Business Tower, Golf Course Road, Gurgaon- 122002
813 Oxford Towers, 139 Airport Road, Bangalore- 560 008
Assessing Officer relied only on post-search documents and public domain data
without establishing any live nexus with assessees, invocation of section 153C and
issuance of notices for alleged undisclosed investment based on difference in land
sale consideration was unsustainable and liable to be quashed.
2. Multiple floors in same property under redevelopment qualify as 'one
residential house' for sec. 54 exemption: ITAT
[2026] 188 taxmann.com 645 (Delhi – Trib.) Ranjan Sen Jain v. Income-tax
Officer
Where assessee, after inheriting a residential property, received basement, ground
and third floors as a single residential house under collaboration agreement and
claimed Section 54 exemption, exemption could not be denied merely because
property comprised separate floors since what mattered was assessee acquired
one residential unit as a whole in consequence of capital gains investment.
3. Unregistered sale agreement without possession transfer won't trigger
capital gains taxation: ITAT
[2026] 187 taxmann.com 173 (Jabalpur – Trib.) Surendra Singh v. Income-tax
Officer
Where assessee entered into an unregistered agreement to sell properties in 2011
but retained possession until execution of registered sale deeds in assessment
year 2014-15, since possession was not handed over in part performance of
agreement, section 2(47)(v) read with section 53A of Transfer of Property Act was
inapplicable and capital gains were chargeable in year of registered transfer.
4. Exemption u/s 10(37) allowed on compulsory acquisition as land consistently
classified agricultural: ITAT
[2026] 187 taxmann.com 676 (Chennai – Trib.) Sundaramahalingam
Narayanan v. Income-tax Officer
Where assessee claimed exemption under section 10(37) on compensation
received for compulsory acquisition of land, since revenue records classified land
as agricultural and revenue failed to establish its conversion or use for non-
agricultural purposes, mere absence of agricultural income in returns could not
RNM Tax Alert – Direct Tax Part for June 2026
Branch Offices: 613, Suncity Business Tower, Golf Course Road, Gurgaon- 122002
813 Oxford Towers, 139 Airport Road, Bangalore- 560 008
justify denial of exemption and thus, compensation received was entitled to
exemption.
5. Resident individual under sec. 115BAC entitled to sec. 87A rebate on STCG
chargeable u/s 111A: ITAT
[2026] 187 taxmann.com 1011 (Mumbai – Trib.) Lisha Gajendra Marlecha v.
Income-tax Department, CPC, Bengaluru
Where resident individual governed by section 115BAC(1A) declared total income
below threshold prescribed under section 87A, which included short-term capital
gains chargeable under section 111A, rebate under section 87A could not be
denied merely because part of income was chargeable under section 111A, in
absence of any express statutory prohibition in sections 87A or 111A during
relevant assessment year.
6. SLP granted: issue whether director's receipts were taxable as salary or
professional income admitted for consideration
[2026] 188 taxmann.com 1031 (SC) Mukesh Gupta v. Deputy Commissioner of
Income-tax
SLP granted against order of High Court that where assessee, a director in
company, claimed receipt from company as professional/technical service fee
assessable as business income but failed to produce any document evidencing
professional or technical services rendered as a financial expert, such receipt was
liable to be treated as salary income.
SLP granted against order of High Court that where assessee claimed deduction of
interest on amounts borrowed and advanced to company, but failed to substantiate
details of professional or technical services to company and did not prove business
nexus between borrowing and advancement of funds, claim of interest expenditure
as business deduction and plea for commercial expediency or set-off against
interest income was not allowable.
Part-B. International Tax – Case Law
1. AO to re-examine if automated software/SaaS services qualified as 'technical
services' under India-Ireland DTAA: ITAT
RNM Tax Alert – Direct Tax Part for June 2026
Branch Offices: 613, Suncity Business Tower, Golf Course Road, Gurgaon- 122002
813 Oxford Towers, 139 Airport Road, Bangalore- 560 008
[2026] 188 taxmann.com 583 (Delhi – Trib.) SFDC Ireland ltd v. Deputy
Commissioner of Income-tax
Where assessee, an Irish company, received revenue from Indian customers from
sale of software, SaaS, support and related services, and Assessing Officer sought
to tax receipts as FTS without examining, in light of Supreme Court's decision in
CIT v. Kotak Securities Ltd. [2016] 67 taxmann.com 356/239 Taxman 139/383 ITR
1 (SC), whether automated services satisfied requirements of 'technical services'
under India-Ireland DTAA, matter was to be remanded for fresh adjudication.
2. Domestic sale prices couldn't be adopted as CUP for benchmarking export
sales in absence of comparable uncontrolled export transactions: ITAT
[2026] 187 taxmann.com 370 (Mumbai – Trib.) Kansai Nerolac Paints Ltd. v.
Deputy Commissioner of Income-tax
Where assessee exported water-based paints to its AE in Philippines and TPO
rejected TNMM and applied CUP by comparing domestic sale prices with export
prices without making adjustments for differences in market conditions and other
relevant factors, rejection of TNMM and adoption of CUP was unjustified as
domestic sales could not be adopted as CUP in absence of comparable
uncontrolled export transactions.
3. Web hosting receipts not taxable as royalty or FTS where customer had no
right to use or control servers: ITAT
[2026] 187 taxmann.com 467 (Chennai – Trib.) Deputy Commissioner of
Income-tax, International Taxation v. ZOHO Corporation
Where assessee, a US company, provided web hosting services through data
centres located outside India and customer neither possessed nor controlled
servers or equipment nor acquired any right to use them, receipts from such
services could not be characterised as royalty or fees for technical services under
section 9(1)(vi) or article 12 of India–USA DTAA; further, Explanations 4 to 6 to
section 9(1)(vi) could not be imported into DTAA in absence of a corresponding
treaty amendment.
4. No TDS required u/s 195 as commission for procuring export orders
rendered outside India not taxable: ITAT
[2026] 188 taxmann.com 77 (Delhi – Trib.) Ajay Sharma v. Income-tax Officer
RNM Tax Alert – Direct Tax Part for June 2026
Branch Offices: 613, Suncity Business Tower, Golf Course Road, Gurgaon- 122002
813 Oxford Towers, 139 Airport Road, Bangalore- 560 008
Where assessee paid commission to a Swedish intermediary for procuring export
orders and follow-up services rendered entirely outside India, such payments
constituted commission income not chargeable to tax in India, thus there was no
obligation to deduct tax at source under Section 195.
5. Corporate guarantee to AE requiring TP benchmarking is international
transaction as it impacts AE's finances: ITAT
[2026] 187 taxmann.com 658 (Mumbai – Trib.) ACT Infraport Ltd. v. Deputy
Commissioner of Income-tax
Where assessee, engaged in shipping and related services, furnished a corporate
guarantee to a bank enabling its associated enterprise to secure a term loan for
acquisition of a ship, such guarantee had a direct bearing on associated
enterprise's financial position and constituted an international transaction requiring
transfer pricing benchmarking, justifying transfer pricing adjustment towards
corporate guarantee commission.