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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)

Suresh Dharnia, Jaipur vs. Income Tax Officer, Jaipur

ITA 236/VIZ/2025[2021-22]Status: DisposedITAT Visakhapatnam18 Jul 2025AY 2021-22

Bench: Us :

Section 139(1)Section 143(1)Section 36(1)(va)Section 43B

assessee has assailed the impugned order on the following grounds of appeal before us : “1. That the disallowance of amount made under Section 36(1)(va) is erroneous and bad in law. The learned AO and CIT(A) failed to appreciate that the contributions to EPF/ESI were deposited before ... been no loss caused to the employees or to the revenue. 3. That the learned authorities have erred in not appreciating that Section 36(1)(va) should be harmoniously construed with Section 43B. The appellant humbly submits that the legislative intent behind Section 43B is to allow genuine claims where

Suresh Dharnia, Jaipur vs. Income Tax Officer, Jaipur

ITA 235/VIZ/2025[2020-21]Status: DisposedITAT Visakhapatnam18 Jul 2025AY 2020-21

Bench: Us :

Section 139(1)Section 143(1)Section 36(1)(va)Section 43B

assessee has assailed the impugned order on the following grounds of appeal before us : “1. That the disallowance of amount made under Section 36(1)(va) is erroneous and bad in law. The learned AO and CIT(A) failed to appreciate that the contributions to EPF/ESI were deposited before ... been no loss caused to the employees or to the revenue. 3. That the learned authorities have erred in not appreciating that Section 36(1)(va) should be harmoniously construed with Section 43B. The appellant humbly submits that the legislative intent behind Section 43B is to allow genuine claims where

Maithri Laboratories Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

In the result, the appeal of the assessee is allowed

ITA 291/HYD/2025[2021-22]Status: DisposedITAT Hyderabad18 Jul 2025AY 2021-22

Bench: Shri Ravish Sood & Shri Madhusudan Sawdia

For Appellant: Shri M.V. Prasad, C.AFor Respondent: Shri Gurpreet Singh, SR-DR
Section 132Section 143(2)Section 143(3)Section 153ASection 36(1)(iii)Section 50(1)Section 50(3)

second issue is concerned, the Ld. AR submitted that the disallowance of Rs.73,02,428/- made by the Ld. AO under Section 36(1)(iii) of the Act is wholly unjustified. He submitted that, the advances in question were made out of the assessee’s own surplus interest-free funds ... interest-free funds were significantly more than the advances, and accordingly, no ITA Nos.288 to 291/Hyd/2025 9 disallowance could be made under Section 36(1)(iii) of the Act. The Ld. AR relied upon the judgment of the Hon’ble Supreme Court in the case of CIT v. Reliance Industries

Msn Life Sciences Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

In the result, the appeal of the assessee is allowed

ITA 290/HYD/2025[2021-22]Status: DisposedITAT Hyderabad18 Jul 2025AY 2021-22

Bench: Shri Ravish Sood & Shri Madhusudan Sawdia

For Appellant: Shri M.V. Prasad, C.AFor Respondent: Shri Gurpreet Singh, SR-DR
Section 132Section 143(2)Section 143(3)Section 153ASection 36(1)(iii)Section 50(1)Section 50(3)

second issue is concerned, the Ld. AR submitted that the disallowance of Rs.73,02,428/- made by the Ld. AO under Section 36(1)(iii) of the Act is wholly unjustified. He submitted that, the advances in question were made out of the assessee’s own surplus interest-free funds ... interest-free funds were significantly more than the advances, and accordingly, no ITA Nos.288 to 291/Hyd/2025 9 disallowance could be made under Section 36(1)(iii) of the Act. The Ld. AR relied upon the judgment of the Hon’ble Supreme Court in the case of CIT v. Reliance Industries

Msn Organics Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

In the result, the appeal of the assessee is allowed

ITA 289/HYD/2025[2021-22]Status: DisposedITAT Hyderabad18 Jul 2025AY 2021-22

Bench: Shri Ravish Sood & Shri Madhusudan Sawdia

For Appellant: Shri M.V. Prasad, C.AFor Respondent: Shri Gurpreet Singh, SR-DR
Section 132Section 143(2)Section 143(3)Section 153ASection 36(1)(iii)Section 50(1)Section 50(3)

second issue is concerned, the Ld. AR submitted that the disallowance of Rs.73,02,428/- made by the Ld. AO under Section 36(1)(iii) of the Act is wholly unjustified. He submitted that, the advances in question were made out of the assessee’s own surplus interest-free funds ... interest-free funds were significantly more than the advances, and accordingly, no ITA Nos.288 to 291/Hyd/2025 9 disallowance could be made under Section 36(1)(iii) of the Act. The Ld. AR relied upon the judgment of the Hon’ble Supreme Court in the case of CIT v. Reliance Industries

Msn Pharmachem Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

In the result, the appeal of the assessee is allowed

ITA 288/HYD/2025[2021-22]Status: DisposedITAT Hyderabad18 Jul 2025AY 2021-22

Bench: Shri Ravish Sood & Shri Madhusudan Sawdia

For Appellant: Shri M.V. Prasad, C.AFor Respondent: Shri Gurpreet Singh, SR-DR
Section 132Section 143(2)Section 143(3)Section 153ASection 36(1)(iii)Section 50(1)Section 50(3)

second issue is concerned, the Ld. AR submitted that the disallowance of Rs.73,02,428/- made by the Ld. AO under Section 36(1)(iii) of the Act is wholly unjustified. He submitted that, the advances in question were made out of the assessee’s own surplus interest-free funds ... interest-free funds were significantly more than the advances, and accordingly, no ITA Nos.288 to 291/Hyd/2025 9 disallowance could be made under Section 36(1)(iii) of the Act. The Ld. AR relied upon the judgment of the Hon’ble Supreme Court in the case of CIT v. Reliance Industries

Deputy Commissioner of Income Tax, Circle-1(3)(1), Mumbai vs. Tmf Holdings Limited, Mumbai

In the result, the appeal of the revenue bearing ITA No

ITA 2983/MUM/2025[2017-18]Status: DisposedITAT Mumbai18 Jul 2025AY 2017-18

Bench: Shri Anikesh Banerjee & Smt. Renu Jauhrideputy Commissioner Of Vs Tmf Holdings Limited 14, 4Th Floor, Sir H C Dinshaw Income Tax, Circle 1(3)(1), Mumbai Building, 16, Horniman Circle, Fort, Room No.535, 5Th Floor, Aaykar Mumbai-400 001 Bhavan, M.K. Road, Mumbai- Pan: Aacct4644A 400 020 Appellant Respondent

For Appellant: Shri Rajan Vora a/w Shri Nikhil TiwariFor Respondent: Shri Ritesh Mishra, CIT DR
Section 115JSection 143(3)Section 144BSection 147Section 148Section 250Section 37(1)

processed under section 143(1) of the Act by accepting the returned loss. Audit objections were raised regarding non-fulfilment of conditions of section 36(1)(vii) read with section 36(2) of the Act basis which the proceedings under section 147 of the Act were initiated [on the other ... makes an expense allowable under the provisions of the Act. Further, the assessee being an NBFC, is covered under the provisions of section 36(1)(vii) and 36(1) (viia). It could have provided for the bad and doubtful debts and even could have written it off. However, instead

M/S. Green Earth Biogas Pvt. Ltd., Surendranagar vs. The Pr. CIT-3, Ahmedabad

ITA 185/RJT/2023[2017-18]Status: DisposedITAT Rajkot17 Jul 2025AY 2017-18

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपीलसं./Ita No.185/Rjt/2023

For Appellant: Shri Hardik Vora, Ld. A.RFor Respondent: Shri Sanjay Pungalia, Ld. Sr. DR
Section 263

Disallowance of amortization expenses of Rs.70,71,825/-, claimed, treating the same to be capital expenditure, in view of the provision of section 36(1)(iii) of the Act, read with explanation 8 to section 43(1) of the Act. With regard to the disallowance of Rs.31,000/- u/s.40A ... under- reporting of income to the extent of Rs.70,71,531/-, which was prima facie not allowable in view of the provisions of Section 36(1)(iii) r.w Explanation 8 to Section 43(1) of the Act. The dropping of penalty in respect of amortization expenses has resulted into loss

Elsamex Maintenance Services Limited, Ahmedabad vs. Dy. Commissioner of Income Tax - Circle Gandhinagar, Gandhinagar

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

ITA 1215/AHD/2025[2019-20]Status: DisposedITAT Ahmedabad17 Jul 2025AY 2019-20

Bench: Shri T R Senthil Kumar & Shri Narendra Prasad Sinha

For Appellant: Shri Bhupal Rapelli, A.RFor Respondent: Shri B.P. Srivastava, Sr. DR
Section 143(1)Section 143(1)(a)Section 244ASection 36(1)(va)Section 41

called for while processing the return. 6. Per contra, Shri B. P. Srivastava, Ld. Sr. DR submitted that as per provision of Section 36(1)(va) of the Act there was no dispute about disallowance of belated payment of employee’s contribution of PF and ESI. He explained that ... upheld the position that the unpaid employees’ contribution to PF and ESI was income of the assessee in accordance with provision of Section 36(1)(va) r.w.s. section 2(24)(x) of the Act. The Hon’ble Supreme Court had examined the intention of the legislature and clarified the provision

Atharva Foundries Private Limited, Pune vs. Assistant Comissioner of Income Tax, Circle 1(1), Pune

In the result, the appeal of the assessee is allowed

ITA 113/PUN/2025[2016-17]Status: DisposedITAT Pune17 Jul 2025AY 2016-17

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

For Appellant: Shri R.C. DoshiFor Respondent: Shri Ramnath P. Murkunde
Section 10(34)Section 143(1)Section 143(2)Section 143(3)Section 14ASection 36(1)(iii)Section 37

penal interest paid by the assessee is an allowable expense u/s 36(1)(iii) of the Act. There is no provision in section 36(1)(iii) of the Act disallowing any interest on money borrowed for working capital purpose. He also raised an alternate contention that the penal interest paid ... Addl./JCIT(A) has confirmed the addition/disallowance made by the Ld. AO for the reasons stated in the preceding paragraphs. 8.1 Section 36(1)(iii) of the Act reads as under : 36(1). The deductions provided for in the following clauses shall be allowed in respect of the matters dealt

DCIT-2(3)(1), Mumbai vs. Indusind Bank Ltd., Mumbai

In the result, the Income Tax Appeal is

ITA 3675/MUM/2023[2018-19]Status: DisposedITAT Mumbai17 Jul 2025AY 2018-19

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

For Appellant: Shri Kalpexh Unadkat &For Respondent: Shri Satya Pal Kumar, CIT-DR
Section 143(3)Section 14ASection 250Section 35DSection 36(1)(via)Section 36(1)(viia)Section 43B

Beneficial rate of DTAA on tax paid on Dividend AY 2018-19 Ground No. 1 AY 2019-20 Ground No. 1 Claim under section 36(1)(viia) for rural Ground No. 2 & 3 advances made by amalgamating company & percentage of deduction allowable Ground No. 2 & 3 Sale of immovable properties ... acquired through loan be treated as Business Income / loss Ground No. 4 Ground No. 4 Claim of standard assets under section 36(1)(viia) Ground No. 5 Ground No. 5 Additional Ground of Appeal- Allowability of additional ESOP costs Ground No. 6 Ground No. 6 Revenue's Appeal Issue

Indusind Bank Ltd, Mumbai vs. The DCIT-2(3)(1), Mumbai

In the result, the Income Tax Appeal is

ITA 1842/MUM/2023[2019-20]Status: DisposedITAT Mumbai17 Jul 2025AY 2019-20

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

Section 143(3)Section 14ASection 250Section 35DSection 36(1)(via)Section 36(1)(viia)Section 43B

under consideration are tabulated below: Assessee's Appeal Issue Claim of Beneficial rate of DTAA on tax paid on Dividend Claim under section 36(1)(viia) for rural advances made by amalgamating company & percentage of deduction allowable Sale of immovable properties acquired through loan be treated as Business Income / loss ... Claim of standard assets under section 36(1)(viia) Additional Ground of Appeal- Allowability of additional ESOP costs AY 2018-19 Ground No. 1 Ground No. 2 & 3 Ground No. 4 Ground No. 5 Ground No. 6 AY 2019-20 Ground No. 1 Ground No. 2 & 3 Ground

Indusind Bank Ltd, 8Th Floor, Tower 1, One India Bulls Centre Delisle Road vs. The DCIT-2(3)(1), Mumbai

ITA 1841/MUM/2023[2018-19]Status: DisposedITAT Mumbai17 Jul 2025AY 2018-19

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

For Appellant: Shri Kalpexh Unadkat &For Respondent: Shri Satya Pal Kumar, CIT-DR
Section 143(3)Section 14ASection 250Section 35DSection 36(1)(via)Section 36(1)(viia)Section 43B

Claim of Beneficial rate of DTAA on tax Ground No. 1 Ground No. 1 paid on Dividend Claim under section 36(1)(viia) for rural Ground No. 2 & 3 Ground No. 2 & 3 advances made by amalgamating company & percentage of deduction allowable Sale of immovable properties acquired Ground ... further appeal before the CIT(A). Before the CIT(A) the assessee made a claim that for the purpose of allowing deduction under section 36(1)(via) the rural advances given by Bharat Financial Inclusion Ltd. (BFIL) an NBFC which got amalgamated with the assessee company from the appointed date

Edge Steels Pvt Ltd, Mumbai vs. ITO Ward 12(2)2, Mumbai

In the result, the appeal of the assesse bearing ITA No

ITA 635/MUM/2025[2012-13]Status: DisposedITAT Mumbai16 Jul 2025AY 2012-13

Bench: the Metropolitan Magistrate Court, Bandra, Mumbai.

For Appellant: Shri Vimal PunmiyaFor Respondent: Shri Ritesh Misra, CIT DR
Section 138Section 143(3)Section 144BSection 250Section 254Section 36Section 36(1)(vii)

upheld the alleged addition by an order dated 24/09/2021 on the ground that the said company had claimed deduction under section 36(1)(vii) of the Act amount to Rs.43,61,237/- which was disallowed and added back with the total income of the assesse. The Ld. AR argued narrated ... issue in the present appeal relates to the disallowance of the assessee's claim of bad debts amounting to Rs.43,61,237/- under section 36(1)(vii) of the Act, which was upheld by the revenue authorities on the ground that the assessee had merely made a provision for doubtful

M/S Gujarat Guardian Ltd., New Delhi vs. DCIT, New Delhi

ITA 2539/DEL/2017[2005-06]Status: DisposedITAT Delhi16 Jul 2025AY 2005-06

Bench: Shri Prakash Chand Yadav & Shri Brajesh Kumar Singh

For Appellant: Shri Ajay Vohra, Sr. A.RFor Respondent: Shri Bhopal Singh, Sr. D.R
Section 92C

debt become actually shown as bad, the assessee is not entitled for the deduction of the bad debt as per the provisions of section 36(1)(vii) of the Act. 18. Counsel for the assessee argued that the assessee has duly written off these debts, which are in the nature

Gujarat Guardian Ltd., New Delhi vs. DCIT, New Delhi

ITA 159/DEL/2010[2003-04]Status: DisposedITAT Delhi16 Jul 2025AY 2003-04

Bench: Shri Prakash Chand Yadav & Shri Brajesh Kumar Singh

Section 92C

debt become actually shown as bad, the assessee is not entitled for the deduction of the bad debt as per the provisions of section 36(1)(vii) of the Act. 18. Counsel for the assessee argued that the assessee has duly written off these debts, which are in the nature

M/S Rajasthan Knowledge Corporation Ltd., Jaipur vs. ACIT, Circle-1, Jaipur

10. In view of the above discussion and findings, this appeal is partly allowed and the impugned order passed by Learned CIT(A) is set aside whereby disallowance of bonus to the tune of Rs

ITA 279/JPR/2025[2018-19]Status: DisposedITAT Jaipur15 Jul 2025AY 2018-19

Bench: Learned Cit(A), Nfac, Delhi, While Challenging Order Dated 25.07.2022 Issued U/S 154 Of Income Tax Act, 1961 (In Short “The Act”), Came To Be Dismissed, While Observing As Under:- “5.6 In View Of The Above, Mandatory Condition Of Making The Payment Of The Employees Contribution To The Pf & Esi Funds Within 15 Days Of The Close Of Every Month, Has Not Been Fulfilled By The Appellant So As To Be Entitled For Claim Of Deduction U/S 36(1)(Va) Of The Act. Accordingly, The Ao’S Action Of Disallowing The Amount On Account Of Disallowance Of Bonus Amount Of Rs. 14,03.,538/- & 2 M/S Rajasthan Knowledge Corporation Ltd., Jaipur. Employees Contrition To Pf Of Rs. 5,172/- Is Hereby Confirmed & Grounds Of Appeal Filed By The Appellant Are Treated As Dismissed.”

For Appellant: Shri P.C. Parwal, C.AFor Respondent: Mrs. Anita Rinesh, JCIT-DR
Section 139(1)Section 143(1)Section 154Section 36(1)(va)Section 43BSection 44A

said amount could be made. Ld. AR for the appellant 5 M/S Rajasthan Knowledge Corporation Ltd., Jaipur. has rightly submitted that provisions of Section 36(1)(va) of the Act cannot be resorted to for disallowance of this amount. Accordingly, we are of the considered view that the impugned order

ITO Ward-4(1), Gurgaon vs. Sandeep Sandha, Gurgaon

ITA 1195/DEL/2022[2018-19]Status: DisposedITAT Delhi15 Jul 2025AY 2018-19

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman

For Appellant: Sh. Samyak Jain, AdvFor Respondent: Sh. Manish Gupta, Sr. DR
Section 143(1)Section 143(1)(a)Section 143(3)Section 147Section 246ASection 260ASection 36(1)(va)

Bothra vs. DCIT (2025) 174 taxmann.com 1199 (Chattisgarh); has already settled the issue in assessee's favour and against the department, the above section 36(1)(va) disallowance of ESI/PF is a highly debatable issue to be rejected in section 143(1) “processing”, reading as under: "Sanjay K. Agrawal ... Sandeep Sandha deposit of employees' share of contribution towards Employees' State Insurance (ESI) and Employees Provident Fund (EPF) of Rs.28,21,065/- under Section 36(1)(va) of the Act of 1961 was disallowed by the order dated 16.12.2021. Feeling aggrieved by the said order, the assessee preferred an appeal

Prysmian Cavi E Sistemi S.R.L, Hyderabad vs. DCIT (Int, Taxn)-2, Hyderabad

The appeal of the assessee is allowed

ITA 1242/HYD/2024[2001-02]Status: DisposedITAT Hyderabad14 Jul 2025AY 2001-02

Bench: Shri Ravish Sood & Shri Madhusudan Sawdia

For Appellant: Shri Nitesh Joshi, C.AFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 143(3)Section 145(3)Section 147Section 263

STE HHART HRT, keRTaTE Te IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad MAR Pe, ane wars wae

Prysmian Cavi E Sistemi Srl India Project Office (Formerly Pirelli Cavi Sistemi S P A India Project Office), Hyderabad vs. DCIT, ( Int Taxn)-2, Hyderabad

In the result, the appeal of the assessee is allowed

ITA 723/HYD/2022[2001-2002]Status: DisposedITAT Hyderabad14 Jul 2025AY 2001-2002
For Appellant: Shri Nitesh Joshi, C.AFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 143(3)Section 145(3)Section 147Section 263

आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad श्री रविश सूद, न्यायिक सदस्य