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“Section 36(1)”

Section References (mined)Section 36Section 36(1)3,872 judgments

The decision most relied on for Section 36(1) is CIT v. Reliance Utilities & Power Ltd. (313 ITR 340), cited in 2,118 judgments on BharatTax.

Leading authorities on Section 36(1)

CIT v. Reliance Utilities & Power Ltd.
313 ITR 340 · 2009 · High Court
2,118
citing judgments

Where an assessee claims that investments were made out of own funds, interest disallowance under Section 14A read with Rule 8D may not apply if the assessee demonstrates the availability of sufficient interest-free funds to cover such investments.

CIT v. AIMIL Ltd.
321 ITR 508 · 2010 · High Court
1,629
citing judgments

Employee contributions to PF and ESIC, deposited beyond the due date under the respective Acts but within the due date for filing the income tax return under Section 139(1), are allowable deductions under Section 36(1)(va). Such disallowance cannot be made during processing under Section 143(1).

S.A. Builders Ltd. v. CIT
288 ITR 1 · 2007 · Supreme Court
1,484
citing judgments

Interest paid on borrowed funds cannot be disallowed merely because the assessee made interest-free advances, provided those advances were made for business purposes and commercial expediency. The Revenue cannot dictate a businessman's commercial decisions, but the assessee bears the onus to prove the business expediency.

Checkmate Services Pvt. Ltd. v. CIT
143 Taxmann.com 178 · 2022 · Supreme Court
1,392
citing judgments

Employee contributions to provident fund and ESI deposited by an employer beyond the due dates prescribed under the respective special Acts are not allowable as a deduction under section 36(1)(va) of the Income-tax Act, 1961. Such disallowance can be made during processing under section 143(1).

CIT v. Alom Extrusions Ltd.
319 ITR 306 · 2009 · Supreme Court
1,344
citing judgments

A proviso inserted into a section to remedy unintended consequences, make the section workable, or supply an obvious omission must be read retrospectively in operation to give effect to the section as a whole.

CIT v. HDFC Bank Ltd.
366 ITR 505 · 2014 · High Court
1,261
citing judgments

When an assessee possesses interest-free funds sufficient to cover investments yielding tax-free income, it is presumed that such investments were made from these interest-free funds, precluding disallowance of interest expenditure under Section 14A.

CIT v. Gujarat State Road Transport Corporation
366 ITR 170 · 2014 · High Court
1,158
citing judgments

Employees' contributions to welfare funds, such as provident fund, are not allowable as a deduction under section 36(1)(va) if deposited beyond the due date prescribed under the respective welfare statutes, even by a single day. Such delayed deposits are not cured even if made before the income-tax return filing due date.

TRF Ltd. v. CIT
323 ITR 397 · 2010 · Supreme Court
714
citing judgments

For claiming deduction for bad debts under section 36(1)(vii) of the Income Tax Act, it is sufficient for the assessee to write off the debt as irrecoverable in its accounts, and it is not necessary to prove that the debt has actually become irrecoverable.

Judgments citing Section 36(1)

Deputy Commissioner of Income Tax, C-1(1)(1), Bangalore vs. Algonomy Software Private Limited (Formerly Known As Manthan Software Services Pvt Ltd), Bangalore

ITA 943/BANG/2023[2012-13]Status: DisposedITAT Bangalore19 Jan 2024AY 2012-13

Bench: Shri Laxmi Prasad Sahu & Ms. Madhumita Roy

For Appellant: Shri Narendra Kumar JainFor Respondent: Ms. Neera Malhotra, CIT-DR
Section 143(3)Section 147Section 148Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY

M/S. the Kothari Wheels, Pune vs. DCIT, CPC, Bangalore, Banglore

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

ITA 1420/PUN/2023[2018-19]Status: DisposedITAT Pune18 Jan 2024AY 2018-19

Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI PARTHA SARATHI CHAUDHURY (Judicial Member)

For Respondent: Shri Ajay Kumar Kesari
Section 139(1)Section 143(1)Section 2Section 2(24)Section 2(24)(x)Section 36(1)(va)Section 43B

taxability of such income in the hands of the assessee. Once such an amount becomes income of the employer-assessee, then section 36(1)(va) comes into play for providing the deduction. This provision provides that: `(va) any sum received by the assessee from any of his employees to which ... deduction for the employees’ share for depositing the same in the relevant funds beyond the due date as given in Explanation 1 to section 36(1)(va) on the strength of section 43B. The latter section opens with a non-obstante clause and provides that a deduction otherwise allowable

Gurusamy Aadhinarayanan, Tiruppur vs. ACIT, CPC Bengaluru, Bangaluru

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

ITA 1041/CHNY/2023[2019-20]Status: DisposedITAT Chennai18 Jan 2024AY 2019-20

Bench: Shri V. Durga Rao & Shri Manjunatha, G.आयकर अपील सं./I.T.A. No.1041/Chny/2023 िनधा"रण वष"/Assessment Years: 2019-20 Gurusamy Aadhinarayanan, Vs. The Income Tax Officer, 25, Vignesam Layout, Gandhinagar Ii Ward 1, Pollachi. Extn., Udumalaipet, Tiruppur 642 126. [Pan:Aclpa5394G] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri N. Kumaresh, Ca ""थ" की ओर से/Respondent By : Shri D. Hema Bhupal, Jcit सुनवाई की तारीख/ Date Of Hearing : 04.01.2024 घोषणा की तारीख /Date Of Pronouncement : 18.01.2024 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi, Dated 25.05.2023 Relevant To The Assessment Year 2019-20. 2. The Appeal Filed By The Assessee Is Delayed By 12 Days In Filing The Appeal & Filed A Petition For Condonation Of Delay In Support Of An Affidavit To Which; The Ld. Dr Has Not Raised Any Serious Objection.

For Appellant: Shri N. Kumaresh, CAFor Respondent: Shri D. Hema Bhupal, JCIT
Section 143(1)Section 36(1)(va)

short] by making disallowance of employees contribution towards Provident Fund and ESI not deposited on or before the due date under section 36(1)(va) of the Act being ₹.10,24,122/- and added exempted income of ₹.22,963/- (interest on PPF account). On appeal, by following the decision ... disallowed the PF & ESI remittance on the ground that the same were not deposited on or before the due date under section 36(1)(va) of the Act. The contention of the assessee is that since the due date of remittance being Government holidays (in May & July), it cannot

Megha Yadav, Gurgaon vs. ITO Ward 2(5), Gurgaon

In the result, the appeal of the assessee is dismissed

ITA 448/DEL/2023[2018-19]Status: DisposedITAT Delhi18 Jan 2024AY 2018-19

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: None
Section 2(24)(x)Section 36(1)(va)Section 43

considering the due dates under the relevant provisions of the Act. The Assessing Officer ruled that by virtue of Section 36(1)(va) read 2 Megha Yadav with Section 2(24)(x) of the IT Act, such sums received by the appellants constituted "income". It was held that those amounts ... could not have been allowed as deductions under Section 36(1)(va) of the IT Act when the payment was made beyond the relevant due date under the respective acts. The Income Tax Appellate Tribunal and later the Gujarat High Court dismissed the challenge against this order

Cedar Infonet Pvt. Ltd., New Delhi vs. DCIT, Circle- 5(2), New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 3462/DEL/2018[2012-13]Status: DisposedITAT Delhi18 Jan 2024AY 2012-13

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri R.S. Ahuja, CAFor Respondent: Shri T. James Singson, CIT-DR
Section 143(3)Section 14ASection 250Section 36(1)(iii)

that all the expenses relating to investment and exempt income has already been capitalized." 3. The first ground concerns disallowance of interest under Section 36(1)(iii) of the Act. 4. In this regard, the ld. counsel submits that the AO while framing the assessment, made a disallowance of Rs.37 ... towards interest expenses under Section 36(1)(iii) by reducing the interest received on loan of Rs.8,35,80,705/- from Rs. 45,65,97,343/-. In the process, the AO omitted to take note of interest capitalized by the assessee amounting to Rs.37,26,73,788/-. The ld. counsel

Jiwanram Sheoduttrai Industries Pvt. Ltd., Kolkata vs. A.C.I.T., Range - 8, Kolkata

In the result, the appeal of the assessee is dismissed

ITA 741/KOL/2022[2012-2013]Status: DisposedITAT Kolkata17 Jan 2024AY 2012-2013

Bench: Dr. Manish Borad & Shri Sonjoy Sarma]

Section 115JSection 143(3)Section 14ASection 2(24)Section 36(1)Section 40Section 43B

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘B’, KOLKATA [Before Dr. Manish Borad, Accountant Member & Shri Sonjoy Sarma, Judicial

Brigs Trading Co. P.Ltd, Mumbai vs. ACIT Cir 6(1), Mumbai

ITA 2270/MUM/2014[2009-10]Status: DisposedITAT Mumbai17 Jan 2024AY 2009-10

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Dcit, Cir 6(1), R.No. 506, 5Th Floor, Aayakar Bhavan, M.K. Road, Mumbai-20. Appellant

Section 143(3)Section 14ASection 36Section 36(1)(vii)

loss and not allowable as trading loss, much less bad-debt. e) The sections which governs the allowability of the bad debts is Section 36(1)(vii) r.w.s. 36(2). As per the provisions of the Income tax Act, no deduction by way of bad debts should be allowed unless ... income including interest/discount or any other charges on NPA shall be recognized only when it is actually realized. The Ld. Counsel referred to section 36(1)(vii) and section 36(2) of the Act and submitted that the bad debt claimed by the assessee represented money lent in the ordinary

Brigs Trading Co. P.Ltd, Mumbai vs. ACIT Cir 6(1), Mumbai

ITA 2269/MUM/2014[2008-09]Status: DisposedITAT Mumbai17 Jan 2024AY 2008-09

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary ()

For Respondent: Mr. Dalpat Shah & Mr. B.S. Sharma
Section 143(3)Section 14ASection 36Section 36(1)(vii)

loss and not allowable as trading loss, much less bad-debt. e) The sections which governs the allowability of the bad debts is Section 36(1)(vii) r.w.s. 36(2). As per the provisions of the Income tax Act, no deduction by way of bad debts should be allowed unless ... income including interest/discount or any other charges on NPA shall be recognized only when it is actually realized. The Ld. Counsel referred to section 36(1)(vii) and section 36(2) of the Act and submitted that the bad debt claimed by the assessee represented money lent in the ordinary

DCIT Cir 6(1), Mumbai vs. Briggs Trading Co, P. Ltd, Mumbai

ITA 2136/MUM/2014[2008-09]Status: DisposedITAT Mumbai17 Jan 2024AY 2008-09

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary ()

For Appellant: Mr. Dalpat Shah & Mr. B.S. SharmaFor Respondent: Mr. Ujjawal Kumar Chavan, Sr. DR
Section 143(3)Section 14ASection 36Section 36(1)(vii)

loss and not allowable as trading loss, much less bad-debt. e) The sections which governs the allowability of the bad debts is Section 36(1)(vii) r.w.s. 36(2). As per the provisions of the Income tax Act, no deduction by way of bad debts should be allowed unless ... income including interest/discount or any other charges on NPA shall be recognized only when it is actually realized. The Ld. Counsel referred to section 36(1)(vii) and section 36(2) of the Act and submitted that the bad debt claimed by the assessee represented money lent in the ordinary

DCIT, Circle- 18(1), New Delhi vs. Nidhi Builders (International) Pvt. Ltd., New Delhi

In the result, Appeal filed by the Revenue is dismissed

ITA 3950/DEL/2017[2012-13]Status: DisposedITAT Delhi17 Jan 2024AY 2012-13

Bench: Shri N.K.Billaiya & Shri Yogesh Kumar U.S.

Section 143(3)Section 36(1)Section 36(1)(vii)Section 36(2)Section 37

Ld.CIT(A) is legally justified in deleting the addition of Rs. 1,41,59,848/- made by the Assessing Officer (the AO) under section 36(1)(vii) of the Income Tax Act, 1961 (the Act) when the assessee had failed to prove that amount was Page 1 of 11 actually ... trading liability and the corresponding amount was actually offered as income in earlier years and without considering the provisions of Section 36(1)(vii) and Section 36(2) of the Act? ii. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting

Tokai Sahakari Sakhar Karkhana Ltd, Hingoli vs. Income Tax Officer, Ward-(1), Jalna

Appeal is partly allowed in above terms

ITA 571/PUN/2023[2018-19]Status: DisposedITAT Pune16 Jan 2024AY 2018-19

Bench: Shri S.S.Godara & Shri G.D.Padmahshaliआयकर अपील सं. / Ita No.571/Pun/2023 िनधा"रण वष" / Assessment Year : 2018-19 Tokai Sahakari Sakhar Karkhana The Income Tax Officer, Ltd., Vs Ward-1, Jalna. Villag Kurunda, Taluka Basmath . District, Hingoli – 431512. Pan: Aaat6997Q Appellant / Assessee Respondent / Revenue Assessee By Shri Anand Partani – Ar Revenue By Shri M.G.Jasnani – Dr Date Of Hearing 16/01/2024 Date Of Pronouncement 16/01/2024

Section 194ASection 250Section 270ASection 37(1)Section 40aSection 43B

buttress the point that the assessee has commenced its sugar production in the relevant previous year only and therefore not covered under section 36(1))(iii)(Proviso) as held as capital expenditure in the preceding assessment years. We do not see any corresponding substantive details coming from the assessee

Kerala State Financial Enterprises Limited, Thrissur vs. DCIT Circle 1(1) & Tps, Thrissur

In the result, the assessee’s appeal is dismissed

ITA 933/COCH/2022[2017-18]Status: DisposedITAT Cochin16 Jan 2024AY 2017-18

Bench: Shri Sanjay Arora & Shri Manomohan Daskerala State Financial Dy. Cit, Circle - 1(1) & Tps Enterprises Ltd. Thrissur Bhadratha, Museum Road Vs. Chembukkavu - 680020 Thrissur [Pan:Aabct3817A] (Appellant) (Respondent)

For Appellant: Shri Harikrishnanunny, CAFor Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 143(3)Section 36(1)(vii)

Revenue claiming satisfaction of the conditions for a write off (of a bad debt as irrecoverable) in accounts, i.e., as mandated by section 36(1)(vii) of the Act, and the law laid down per the cited decisions, i.e., where effected not directly by a debit to the operating statement ... profits arrived at on commercial principles subject to the provisions of the Income-tax Act. Therefore, if by the Explanation to section 36(1)(vii) a provision for doubtful debt is kept out of the ambit of the bad debt which is written off then, one has to take into

Housing Devp. Fin.Corpn. Ltd vs. The ADIT Cir. 1(1)

ITA 552/MUM/2004[98-99]Status: DisposedITAT Mumbai15 Jan 2024

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 144Section 14ASection 36(1)(viii)

Concise Grounds of Appeal); (b) Whether in arriving at the quantum of deduction available to the Appellant under section 36(1)(viii) of the Income-tax Act ('the Act') the Appellant is justified in taking into consideration: (i) income by way of interest on loans given for residential purposes ... currency borrowings and provision for contingencies should also be allocated as deductible against income which is alleged to be ineligible for deduction under section 36(1)(viii) of the Act, and further, whether other common expenses should be allocated in the final ratio of eligible to the ineligible income. (refer

Shri Sandeep Jagdishchandra Dave, Ahmedabad vs. Teh Pr. CIT -3, Ahmedabad

In the result, the appeal of the assessee is dismissed

ITA 176/AHD/2020[2014-15]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2014-15

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Dipen Shukhadia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R
Section 143(3)Section 197Section 263Section 36(1)(va)

late deposit of employees’ contribution to PF and ESIC for a sum of Rs. 23,72,554/-, which was disallowable under Section 36(1)(va) of the Act. However, the Assessing Officer only disallowed a sum of Rs. 4,57,757/- and hence the difference ... PF/ESI we observe that evidently vide letter dated 22.07.2016, the assessee has admitted that there was late deposit of employees’ contribution under Section 36(1)(va) of the Act. We are further unable to accept the fact that since this issue was discussed by the Assessing Officer during the course

Sumangal Glass Pvt. Ltd., Bhachau vs. DCIT, Circle-4(1)(1), Ahmedabad

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

ITA 2636/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2012-13

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyalआयकरअपीलसं./Ita No. 2636/Ahd/2017 धििाधरणवरध/Asstt. Year: 2012-2013 Sumangal Glass Pvt. Ltd., D.C.I.T, Plot No.617/1-618-620, Vs. Circle-4(1)(1), Nh-8A,Po.Samakhiyari Ahmedabad (Piprapati), Bhachau Taluka, Samakhiyari-370150. Pan: Aaics6992G

For Appellant: Shri Manish J Shah, with Shri Rushin Patel, ARsFor Respondent: Shri Ashok Kumar Suthar, Sr. DR
Section 194CSection 36(1)(va)Section 40

raised by the assessee is that the Ld. CIT(A), erred in confirming the addition made by the AO under the provision of section 36(1)(va) of the Act. 12. The AO during the assessment proceeding found that the assessee deposited employee contribution towards the provident fund amounting ... 1,50,202/- after the due date specified under PF Act. Therefore, the AO, by invoking the provision of section 36(1)(va) r.w.s. 2(24)(x) of the Act treated the same as income and added to the total income of the assessee. Asstt. Year

Reliance Smsl Ltd, Mumbai vs. DCIT CPC, Bangalore

ITA 1726/MUM/2021[2017-18]Status: DisposedITAT Mumbai12 Jan 2024AY 2017-18

Bench: Shri Kuldip Singh & Shri S Rifaur Rahmanassessment Year: 2017-18

For Appellant: Shri Nimesh Vora, A.RFor Respondent: Smt Mahita Nair, Sr. A.R
Section 115JSection 143(1)Section 143(1)(a)Section 143(3)Section 2(24)(x)Section 36(1)(va)Section 43B

36(1)(va) of the Act 4. Erred in confirming the action of the AO in disallowing 2,33,94,090/- under section 36(1)(va) of Act on the basis that there has been delay in depositing of employees' contribution towards Employee State Insurance ("ESI") as reported ... employees' contribution towards ESI was made before the due date of filing the return of Income, accordingly such payment cannot be disallowed under section 36(1)(va) or even under section 43B. The appellant craves leave to add, to amend, vary or alter including by substitution any of the grounds

DCIT, Circle-2(1), Hyderabad vs. Kmc Constructions Limited, Hyderabad

In the result, the appeal of Revenue is dismissed, and the appeal of assessee is partly allowed

ITA 32/HYD/2017[2011-12]Status: DisposedITAT Hyderabad11 Jan 2024AY 2011-12

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri S. Rama Rao, ARFor Respondent: Shri K. Madhusudan, CIT-DR
Section 145(3)

under section 14A of the Act read with Rule 8D of the Rules and also the disallowance of interest expense under section 36(1)(iii) of the Act at Rs. 8,38,75,714/-. According to the learned Assessing Officer, some of the borrowed funds were diverted to sister concerns ... which is the subject matter of Ground No. 4; whereas he calculated the interest expense on the loans to be disallowed under section 36(1)(iii) of the Act at Rs. 8,38,75,714/-. 16. When the assessee appealed, learned CIT(A) found that the sister concerns

Kmc Contructions Limited, Hyderabad vs. Addl. CIT, Range-2, Hyderabad

In the result, the appeal of Revenue is dismissed, and the appeal of assessee is partly allowed

ITA 1734/HYD/2016[2011-12]Status: DisposedITAT Hyderabad11 Jan 2024AY 2011-12

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri S. Rama Rao, ARFor Respondent: Shri K. Madhusudan, CIT-DR
Section 145(3)

under section 14A of the Act read with Rule 8D of the Rules and also the disallowance of interest expense under section 36(1)(iii) of the Act at Rs. 8,38,75,714/-. According to the learned Assessing Officer, some of the borrowed funds were diverted to sister concerns ... which is the subject matter of Ground No. 4; whereas he calculated the interest expense on the loans to be disallowed under section 36(1)(iii) of the Act at Rs. 8,38,75,714/-. 16. When the assessee appealed, learned CIT(A) found that the sister concerns

Marca Coroma Bathtech Pvt. Ltd., Jhajjar vs. ITO, Ward-2, Rohtak

In the result, the appeal of the assessee is allowed for statistical

ITA 1993/DEL/2023[2019-20]Status: DisposedITAT Delhi11 Jan 2024AY 2019-20

Bench: Shri Shamim Yahyamarca Coroma Bathtech Pvt. Ltd., Vs. Ito, Ward 2, 36Th Mile Stone, Ganpati Industrial Area, Rohtak. Delhi Rohtak Road, Bahadur Garh, Jhajjar – 124 507 (Haryana). (Pan : Aalcm7040A) (Appellant) (Respondent) Assessee By : Shri Jagjit Singh, Ca Revenue By : Shri Om Prakash, Sr. Dr Date Of Hearing : 08.01.2024 Date Of Order : 11.01.2024

For Appellant: Shri Jagjit Singh, CAFor Respondent: Shri Om Prakash, Sr. DR
Section 139Section 143Section 143(1)Section 154Section 250Section 36(1)(va)

addition/disallowance of Rs.12,16,628/- u/s 36(1)(va) of the Act on account of contributions received from employees for funds referred in Section 36(1)(va) of the Act. 6. That the CIT(A)/CPC has failed to appreciate that the Finance Act, 2021 amendment is prospective in nature ... have heard both the parties and perused the records. 6. Ld. Counsel of the assessee contended that in the present case, disallowance under section 36(1)(va) of the Act has been mechanically done by lifting the dates from the tax audit report. He submitted that in fact

Gurcharan Singh Bhatia, New Delhi vs. ACIT Circle-47(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 3433/DEL/2019[2014-15]Status: DisposedITAT Delhi11 Jan 2024AY 2014-15

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasad:Assessment Year: 2014-15 Shri Gurcharan Singh Bhatia, Vs. Acit, C-9, Westend Colony, Circle 47(1), New Delhi-1100 21 New Delhi (Appellant) (Respondent) (Pan:Ahnpb4697E) Assessee By : S/Shri K. Sampath & V. Rajkumar, Advocates Revenue By : Shri Amit Katoch, Sr. Dr Date Of Hearing : 29.11.2023 Date Of Pronouncement: 11.01.2024 Order Per Challa Nagendra Prasad:This Appeal Is Filed By The Assessee Against The Order Of The Learned Commissioner Of Income-Tax (Appeals)-16, New Delhi

For Appellant: S/Shri K. Sampath & V. RajkumarFor Respondent: Shri Amit Katoch, Sr. DR
Section 37(1)Section 68

there is no nexus between the interest paid on funds borrowed and the income earned and, therefore, not allowable as deduction under Section 36(1)(3) of the Act. The claim of the assessee that the expenditure is allowable under Section 37(1) of the Act was also denied