CIT v. Rajendra Prasad Moody

115 ITR 519Supreme Court of India1978#183 most cited

What is CIT v. Rajendra Prasad Moody authority for?

For deductions under Section 57(iii) relating to "Income from Other Sources," an expenditure is allowable if it is laid out wholly and exclusively for the purpose of making or earning such income, even if no income is actually earned in that previous year.

386

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2009 to 2026.

Also referred to as

CIT v. Rajendra Prasad Moody · Rajendra Prasad Moody · 115 ITR 519 · Section 57(iii) · Income from Other Sources · deductibility of expenditure · expenses without income · wholly and exclusively · purpose of making income · Section 14A distinction · disallowance of expenses

Sections most often in play

Section 143(3)Section 57(iii)Section 1961Section 14ASection 37(1)Section 68Section 36(1)(iii)Section 143(2)

Issues it is cited on

section 57(iii)section 57disallowance u/s 14adisallowance under section 14asection 14acapital expendituresection 37(1)income from other sourcessection 37salaryprevious yearsection 10

Judgments citing CIT v. Rajendra Prasad Moody

ASST CIT 2(2)(1), MUMBAI vs. STATE BANK OF INDIA, MUMBAI

In the result appeal filed by the assessee as well as revenue stands partly allowed for statistical purposes

ITA 3882/MUM/2017[2010-11]Status: DisposedITAT Mumbai21 Apr 2026AY 2010-11

Bench: Smt. Beena Pillai () & Shri Jagadish ()

Section 14ASection 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 43B

…at part of the interest may be disallowed (sic-allowed). This contention of the learned counsel of the assessee is also rejected…” (d) In a similar case, this principle has been upheld by the Supreme Court in CIT West Bengal III v Rajendra Prasad Moody [1978] 115 ITR 519 concerning deduction of expenditure u/s 57(iii) for earning income from other sources when no income was earned. The Supreme Court allowed the claim with the following observation: P 522 “What s.57(iii) requires is that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. It is the purpo…

STATE BANK OF INDIA,MUMBAI vs. ASST CIT CIR 2(2), MUMBAI

In the result appeal filed by the assessee as well as revenue stands partly allowed for statistical purposes

ITA 3680/MUM/2017[2010-11]Status: DisposedITAT Mumbai21 Apr 2026AY 2010-11

Bench: Smt. Beena Pillai () & Shri Jagadish ()

Section 14ASection 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 43B

…at part of the interest may be disallowed (sic-allowed). This contention of the learned counsel of the assessee is also rejected…” (d) In a similar case, this principle has been upheld by the Supreme Court in CIT West Bengal III v Rajendra Prasad Moody [1978] 115 ITR 519 concerning deduction of expenditure u/s 57(iii) for earning income from other sources when no income was earned. The Supreme Court allowed the claim with the following observation: P 522 “What s.57(iii) requires is that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. It is the purpo…

DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), CHANDIGARH vs. ASIA RESORTS PRIVATE LIMITED, CHANDIGARH

In the result, the appeal of the Revenue is dismissed

ITA 497/CHANDI/2023[2017-18]Status: DisposedITAT Chandigarh12 Mar 2026AY 2017-18

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. MANOJ KUMAR AGGARWAL (Accountant Member)

For Appellant: Shri Parveen Kumar, CAFor Respondent: Shri Vivek Vardhan, Addl. CIT, Sr. DR
Section 14ASection 268A

…ound that disallowance cannot be made where there is no exempt income without appreciating the fact that applicability of section 14A or Rure 8D does not depend on earning of income as held by Supreme Court in the case of CIT vs. Rajender prasad Moody (1978), 115 ITR 519. 3. That the Ld. CIT(A) has erred in ignoring the legislative intent expressed in CBDT,s Circular no. 5/2074 dated 11.02.2014, which explicitly states that expenses relatable to earning of exempt income have to be considered for disallowance irrespective of the fact whether any such income has been earned during the Financial year or not as confi…

THE PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 vs. R.J. CORP. LTD.

The appeal of the assessee is allowed

ITA/743/2025HC Delhi12 Dec 2025

Bench: HON'BLE MR. JUSTICE V. KAMESWAR RAO,HON'BLE MR. JUSTICE VINOD KUMAR

Section 14Section 14A

…ITA 743/2025 Page 1 of 18 $~23 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision : 12.12.2025 + ITA 743/2025 CM APPL. 78546/2025 THE PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 .....Appellant Through: Mr. Ruchir Bhatia SSC with Mr. Anant Mann JSC. versus R.J. CORP. LTD. .....Respondent Through: Mr. Divyansh Jain, Mr. Paritosh Jain, Mr. Apoorv Saini and Mr. Abhishek, Advs. CORAM: HON'BLE MR. JUSTICE V. KAMESWAR RAO HON'BLE MR. JUSTICE VINOD KUMAR V. KAMESWAR RAO…

RAMA KANT SABOO,JAIPUR vs. ACIT CIRCLE 7, BABA SIDDHANATHA BHAWAN

In the result, the appeal of the assessee is dismissed

ITA 1490/JPR/2024[2018-19]Status: DisposedITAT Jaipur28 Oct 2025AY 2018-19
For Appellant: Shri Ashok Kanodia, CAFor Respondent: Shri Gautam Singh Choudhary, JCIT-DR
Section 143Section 234Section 57

…ii) permits deduction of any expenditure, not being capital in nature, laid out  wholly and exclusively for the purpose of making or earning income under the head “Income from Other Sources.”  The Hon’ble Supreme Court in CIT v. Rajendra Prasad Moody (1978) 115 ITR 519 (SC) held that it is not necessary that expenditure must result in income; it is sufficient if the expenditure is incurred with a view to earn income. Similarly, in Eastern Investments Ltd. v. CIT (1951) 20 ITR 1 (SC), the Apex Court  observed that an expenditure need not yield immediate profits, but must be connected with or incidental to the e…

LATE SH BHAGAT CHAJJU RAM MEMORIAL TRUST,JAMMU vs. ITO EXEMPTION, JAMMU

In the result, the captioned four appeals of the assessee are allowed for

ITA 500/ASR/2024[2022-23]Status: DisposedITAT Amritsar26 Sept 2025AY 2022-23

Bench: Dr. M. L. Meena & Sh. Udayan Dasgupta(Physical Hearing)

Section 11Section 143(1)Section 143(3)

…was brought to tax as income from other sources, all relevant expenditure were also to be allowed. 7.2 The Ld. AR also placed reliance on the Judgement of the Hon'ble Supreme Court in the case of Commissioner of Income tax v/s Rajendra Prasad Moody- (1978) 115 ITR 519 (SC) wherein it has been held by the Hon'ble Apex Court that 8 I.T.A. No. 497 to 500/Asr/2024 Assessment Year: 2017-18 to 2019-20 Assessment Year: 2022-23 section 57(iii) must be construed broadly and the somewhat wider language of section 37(1) should not affect the interpretation of section 57(iii). The expenditure incurred by the assessee…

LATE SH BHAGAT CHAJJU RAM MEMORIAL TRUST,JAMMU vs. ITO EXEMPTION, JAMMU

In the result, the captioned four appeals of the assessee are allowed for

ITA 499/ASR/2024[2019-20]Status: DisposedITAT Amritsar26 Sept 2025AY 2019-20

Bench: Dr. M. L. Meena & Sh. Udayan Dasgupta(Physical Hearing)

Section 11Section 143(1)Section 143(3)

…was brought to tax as income from other sources, all relevant expenditure were also to be allowed. 7.2 The Ld. AR also placed reliance on the Judgement of the Hon'ble Supreme Court in the case of Commissioner of Income tax v/s Rajendra Prasad Moody- (1978) 115 ITR 519 (SC) wherein it has been held by the Hon'ble Apex Court that 8 I.T.A. No. 497 to 500/Asr/2024 Assessment Year: 2017-18 to 2019-20 Assessment Year: 2022-23 section 57(iii) must be construed broadly and the somewhat wider language of section 37(1) should not affect the interpretation of section 57(iii). The expenditure incurred by the assessee…

LATE SH BHAGAT CHAJJU RAM,JAMMU vs. ITO EXEMPTION JAMMU, JAMMU

In the result, the captioned four appeals of the assessee are allowed for

ITA 498/ASR/2024[2018-19]Status: DisposedITAT Amritsar26 Sept 2025AY 2018-19

Bench: Dr. M. L. Meena & Sh. Udayan Dasgupta(Physical Hearing)

Section 11Section 143(1)Section 143(3)

…was brought to tax as income from other sources, all relevant expenditure were also to be allowed. 7.2 The Ld. AR also placed reliance on the Judgement of the Hon'ble Supreme Court in the case of Commissioner of Income tax v/s Rajendra Prasad Moody- (1978) 115 ITR 519 (SC) wherein it has been held by the Hon'ble Apex Court that 8 I.T.A. No. 497 to 500/Asr/2024 Assessment Year: 2017-18 to 2019-20 Assessment Year: 2022-23 section 57(iii) must be construed broadly and the somewhat wider language of section 37(1) should not affect the interpretation of section 57(iii). The expenditure incurred by the assessee…

LATE SH BHAGAT CHAJJU RAM MEMORIAL TRUST,JAMMU vs. ITO, JAMMU

In the result, the captioned four appeals of the assessee are allowed for

ITA 497/ASR/2024[2017-18]Status: DisposedITAT Amritsar26 Sept 2025AY 2017-18

Bench: Dr. M. L. Meena & Sh. Udayan Dasgupta(Physical Hearing)

Section 11Section 143(1)Section 143(3)

…was brought to tax as income from other sources, all relevant expenditure were also to be allowed. 7.2 The Ld. AR also placed reliance on the Judgement of the Hon'ble Supreme Court in the case of Commissioner of Income tax v/s Rajendra Prasad Moody- (1978) 115 ITR 519 (SC) wherein it has been held by the Hon'ble Apex Court that 8 I.T.A. No. 497 to 500/Asr/2024 Assessment Year: 2017-18 to 2019-20 Assessment Year: 2022-23 section 57(iii) must be construed broadly and the somewhat wider language of section 37(1) should not affect the interpretation of section 57(iii). The expenditure incurred by the assessee…

ACIT CENTRAL CIRCLE 3(2), MUMBAI vs. NITIN FIRE PROTECTION INDUSTRIES LTD, MUMBAI

In the result, both the appeals filed by the revenue are dismissed

ITA 4476/MUM/2025[2016-17]Status: DisposedITAT Mumbai17 Sept 2025AY 2016-17

Bench: Shri Saktijit Dey, Hon’Ble & Shri Narendra Kumar Billaiya, Hon’Ble

For Appellant: Shri Sanjay N. Kapadiaa, A/RFor Respondent: Shri Satyaprakash R. Singh, CIT D/R
Section 10ASection 115JSection 143(3)Section 14ASection 68

…he Ld. CIT(A) is correct in deleting the disallowance made by the AO with regard to the applicability of provisions of section 14A r.w.r. 8D of the Act and ignoring the decision of the Hon'ble Supreme. Court in the case of CIT Vs. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) and CBDT's Circular No. 5 of 2014 dated 11.02.2014 and further by not considering the retrospective applicability of Explanation to Section 14A introduced via Finance Act 2022?” 3. Briefly stated the facts of the case are that the assessee filed its return of income on 28/11/2016 declaring total income at Rs. 22,97,960/- under normal provis…

ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 3(2), MUMBAI, MUMBAI vs. NITIN FIRE PROTECTION INDUSTRIES LTD, MUMBAI

In the result, both the appeals filed by the revenue are dismissed

ITA 3695/MUM/2025[2016-17]Status: DisposedITAT Mumbai17 Sept 2025AY 2016-17

Bench: Shri Saktijit Dey, Hon’Ble & Shri Narendra Kumar Billaiya, Hon’Ble

For Appellant: Shri Sanjay N. Kapadiaa, A/RFor Respondent: Shri Satyaprakash R. Singh, CIT D/R
Section 10ASection 115JSection 143(3)Section 14ASection 68

…he Ld. CIT(A) is correct in deleting the disallowance made by the AO with regard to the applicability of provisions of section 14A r.w.r. 8D of the Act and ignoring the decision of the Hon'ble Supreme. Court in the case of CIT Vs. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) and CBDT's Circular No. 5 of 2014 dated 11.02.2014 and further by not considering the retrospective applicability of Explanation to Section 14A introduced via Finance Act 2022?” 3. Briefly stated the facts of the case are that the assessee filed its return of income on 28/11/2016 declaring total income at Rs. 22,97,960/- under normal provis…

SHRI JAGDISHBHAI GORDHANBHAI DOABARIYA ,RAJKOT vs. THE PR. CIT-1, RAJKOT, RAJKOT

In the result, appeal filed by the assessee, is allowed

ITA 142/RJT/2023[2018-19]Status: DisposedITAT Rajkot29 Aug 2025AY 2018-19

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं/.Ita No.142/Rjt/2023 "नधा"रणवष"/ Assessment Year: 2018-19 Jagdishbhai Gordhanbhai Dobariya The Pr.Cit-1 बनाम “Ramdev”2, Jivnath Park,B/H. Panchvati Aayakar Bhavan, Race Hall,Panchvati Main Road,Nr.Gandhi Vs. Course Ring Road, School,Rajkot 360 001 Rajkot. Pan : Abrpd8654R (अपीलाथ"/Assessee) (""यथ"/Respondent) :

For Appellant: Shri Rajendra Singhal, ld.ARFor Respondent: Shri Sanjay Punglia, ld.CIT-DR
Section 143(3)Section 263Section 57

…gally incorrect and this basis of the Ld. Pr. CIT is, therefore, for denying the claim of expenditure u/s. 57(iii) of the Act is liable to be quashed. In this regard, we rely upon judgment of the Hon’ble Supreme Court in case of CIT vs. Rajendra Prasad Moody, 115 ITR 519 (SC), which says that : “What s. 57(iii) requires is that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. It is the purpose of the expenditure that is relevant in determining the applicability of s. 57(iii) and that purpose must be making or earning of income. S. 57(iii) does not re…

ALNESH AKIL SOMJI,PUNE vs. ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

In the result, both the appeals filed by the assessee are partly allowed for statistical purposes

ITA 35/PUN/2025[2019-20]Status: DisposedITAT Pune27 Jun 2025AY 2019-20

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Nitin RanderFor Respondent: Shri Amol Khairnar CIT-DR
Section 132Section 139(1)Section 143(2)Section 153ASection 24

…sh Goyal vs. ACIT vide ITA No.234/Agra/2018, for assessment year 2015-16, order dated 04.11.2019 where the Tribunal after considering the various decisions including the decision of the Hon'ble Supreme Court in the case of CIT vs. Rajendra Prasad Moody (1978) 115 ITR 519 (SC) and various other decisions allowed the claim of the assessee by observing as under: “7. Heard. It is undisputed fact that the appellant assessee has received loans from third parties and Financial Institutions and advanced the same to the related parties either at equal interest rates or lower rates. The ld. CIT(A) has mentioned that the c…

ALNESH MOHAMADAKIL SOMJI,PUNE vs. ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 34/PUN/2025[2018-19]Status: DisposedITAT Pune27 Jun 2025AY 2018-19

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Nitin RanderFor Respondent: Shri Amol Khairnar CIT-DR
Section 132Section 139(1)Section 143(2)Section 14ASection 153ASection 24

…h Goyal vs. ACIT vide ITA No.234/Agra/2018, for assessment year 2015-16, order dated 04.11.2019 where the Tribunal after considering the various decisions including the decision of the Hon'ble Supreme Court in the case of CIT vs. Rajendra Prasad Moody (1978) 115 ITR 519 (SC) and various other decisions allowed the claim of the assessee by observing as under: "7. Heard. It is undisputed fact that the appellant assessee has received loans from third parties and Financial Institutions and advanced the same to the related parties either at equal interest rates or lower rates. The ld. CIT(A) has mentioned that the co…

JACOB THOMAS,KOZHENCHERRY vs. ACIT,THIRUVALLA RANGE, THIRUVALLA

In the result, the appeals filed by the assessee stand allowed

ITA 136/COCH/2024[2018-2019]Status: DisposedITAT Cochin14 May 2025AY 2018-2019

Bench: Shri Inturi Rama Rao, Am & Shri Soundararajan K., Jm

For Appellant: Shri Rajakannan, AdvocateFor Respondent: Smt. Leena Lal, Sr. D.R
Section 143(3)Section 57Section 68

…eness and creditworthiness of the transactions. He submitted that no disallowance of interest can be made merely because the investment has not yielded interest, placing reliance on the decision of the Hon'ble Supreme Court in the case of Rajendra Prasad Mody 115 ITR 519. 7. On the other hand, the learned Sr. DR vehemently opposed allowance of interest paid on loans borrowed from friends and relatives. 8. On perusal of the assessment order it is clear that the AO denied deduction of interest paid on loans borrowed solely on the ground that the appellant failed to prove the genuineness of the loans as well as the…

JACOB THOMAS,KOZHENCHERRY vs. ACIT,THIRUVALLA RANGE, THIRUVALLA

In the result, the appeals filed by the assessee stand allowed

ITA 135/COCH/2024[2017-2018]Status: DisposedITAT Cochin14 May 2025AY 2017-2018

Bench: Shri Inturi Rama Rao, Am & Shri Soundararajan K., Jm

For Appellant: Shri Rajakannan, AdvocateFor Respondent: Smt. Leena Lal, Sr. D.R
Section 143(3)Section 57Section 68

…eness and creditworthiness of the transactions. He submitted that no disallowance of interest can be made merely because the investment has not yielded interest, placing reliance on the decision of the Hon'ble Supreme Court in the case of Rajendra Prasad Mody 115 ITR 519. 7. On the other hand, the learned Sr. DR vehemently opposed allowance of interest paid on loans borrowed from friends and relatives. 8. On perusal of the assessment order it is clear that the AO denied deduction of interest paid on loans borrowed solely on the ground that the appellant failed to prove the genuineness of the loans as well as the…

JACOB THOMAS,KOZHENCHERRY vs. ACIT,THIRUVALLA RANGE, THIRUVALLA

In the result, the appeals filed by the assessee stand allowed

ITA 133/COCH/2024[2016-2017]Status: DisposedITAT Cochin14 May 2025AY 2016-2017

Bench: Shri Inturi Rama Rao, Am & Shri Soundararajan K., Jm

For Appellant: Shri Rajakannan, AdvocateFor Respondent: Smt. Leena Lal, Sr. D.R
Section 143(3)Section 57Section 68

…eness and creditworthiness of the transactions. He submitted that no disallowance of interest can be made merely because the investment has not yielded interest, placing reliance on the decision of the Hon'ble Supreme Court in the case of Rajendra Prasad Mody 115 ITR 519. 7. On the other hand, the learned Sr. DR vehemently opposed allowance of interest paid on loans borrowed from friends and relatives. 8. On perusal of the assessment order it is clear that the AO denied deduction of interest paid on loans borrowed solely on the ground that the appellant failed to prove the genuineness of the loans as well as the…

JACOB THOMAS,KOZHENCHERRY vs. ACIT, THIRUVALLA RANGE, THIRUVALLA

In the result, the appeal filed by the assessee stands allowed

ITA 137/COCH/2024[2020-2021]Status: DisposedITAT Cochin27 Mar 2025AY 2020-2021

Bench: Shri Inturi Rama Rao, Am Assessment Year: 2020-21 Jacob Thomas .......... Appellant 1 Mulamoottil, Kozhencherry Pathanamthitta 689641 [Pan: Ackpt3269L] Vs. Asst. Commissioner Of Income Tax .......... Respondent Thirivalla

For Appellant: Shri Rajakannan, AdvocateFor Respondent: Smt. Leena Lal, Sr. D.R
Section 143(3)Section 57Section 68

…IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM Assessment Year: 2020-21 Jacob Thomas .......... Appellant 1 Mulamoottil, Kozhencherry Pathanamthitta 689641 [PAN: ACKPT3269L] vs. Asst. Commissioner of Income Tax .......... Respondent Thirivalla Appellant by: Shri Rajakannan, Advocate Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 12.03.2025 Date of Pronouncement: 27.03.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 27.12.2023 for Assessment Year (AY) 2020-21. 2. Br…

JSW ENERGY LIMITED,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE 8(3), MUMBAI, MUMBAI

In the result, both the appeals are allowed partly for statistical\npurposes

ITA 3714/MUM/2024[2020-21]Status: DisposedITAT Mumbai26 Mar 2025AY 2020-21
Section 115JSection 14ASection 37Section 80I

…ed in a financial year,\nSection 14A cannot be invoked. The Special Bench of Tribunal\nacknowledged conflicting views, particularly the Special Bench\ndecision dated 5th August, 2009 in Cheminvest Ltd., which had\nrelied on CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) to\nhold that even if no income was earned, expenses could still be\ndisallowed. However, the Tribunal followed the Hon'ble Delhi High\nCourt's ruling in Holcim India (P) Ltd (supra), as per the principle of\njudicial hierarchy, making it binding within its jurisdiction. The\nHon'ble Supreme Court's decision in Rajendra Prasad Moody was\ndis…

JSW ENERGY (BARMER) LIMITED,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 8(3), MUMBAI, MUMBAI

In the result, both the appeals are allowed partly for statistical

ITA 3713/MUM/2024[2020-21]Status: DisposedITAT Mumbai26 Mar 2025AY 2020-21

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: Ms. Neena Jeph, CIT-DR/For Respondent: Mr. Gaurav Kabra
Section 14A

…cting view acknowledged conflicting views, particularly the s, particularly the Special Bench decision dated 5th August, 2009 August, 2009 in Cheminvest Ltd. Cheminvest Ltd., which had relied on CIT v. Rajendra Prasad Moody CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) [1978] 115 ITR 519 (SC) to hold that even if no income was earned, hold that even if no income was earned, expenses could still be expenses could still be disallowed. However, the Tribunal followed the However, the Tribunal followed the Hon’ble Hon’ble Delhi High Court's ruling in Holcim India (P) Ltd Holcim India (P) Ltd (supra), as per the…

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