Authority: Supreme Court of India

Order Date: 04-08-2026

Case Overview

  • Petition for Special Leave to Appeal (C) No.25080/2026 filed by M/S PVP Corporate Parks Pvt Ltd (Petitioner) against the Deputy Commissioner (Respondent).
  • The petition arises from the impugned final judgment and order dated 30-03-2026 in TCA No. 636/2016 passed by the High Court of Judicature at Madras.
  • Core issue: Whether capital profit on the sale of the company's fixed assets can be transferred directly to reserves and surplus, or must be routed through the profit and loss account to determine book profits under Section 115JB of the Income Tax Act, 1961.
  • High Court held that the capital profit must be routed through the profit and loss account and cannot be taken directly to reserves and surplus.

Observations & Directions

1. The Court heard the senior counsel for the petitioner.

2. It accepted the High Court’s substantial question of law favoring the Revenue on the treatment of capital profit.

3. The exemption application filed by the petitioner was allowed.

4. The Court ordered that a notice be issued, returnable within four weeks.

5. Dasti service (service by hand‑delivery) was permitted in addition to regular service.

6. The Court directed that no coercive steps be taken against the petitioner‑assessee during the pendency of the proceedings.

Final Outcome

  • The Supreme Court granted the exemption sought by PVP Corporate Parks Pvt Ltd, mandated issuance of a notice within four weeks, permitted dasti service, and prohibited any coercive action against the petitioner until further orders.

Topics: Taxation, Legal Appeal