“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 Circle-7 Pune, Pune vs. Kolte Patil Integrated Townships Limited, Pune

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

ITA 2023/PUN/2024[2014-15]Status: DisposedITAT Pune10 Mar 2025AY 2014-15

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

For Appellant: Shri Nikhil S PathakFor Respondent: Shri Amol Khairnar CIT-DR

Section 143(3)Section 147Section 148Section 148ASection 151

rightly been debited to Profit & Loss account in the year in which the interest expenditure is incurred. 25. Referring to the provisions of section 36(1)(iii), he submitted that once the borrowed funds are utilized for the purpose of business of the assessee, interest is allowable as deduction ... such interest expenditure has to be allowed in the year in which such interest expenditure is incurred. 48. We find the provisions of section 36(1)(iii) of the Act which read as under: (iii) the amount of the interest paid in respect of capital borrowed for the purposes

Deputy Commissioner of Income Tax Circle 7 Pune, Pune vs. Kolte Patil Integrated Townships Limited, Pune

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

ITA 2011/PUN/2024[2016-17]Status: DisposedITAT Pune10 Mar 2025AY 2016-17

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

For Appellant: Shri Nikhil S PathakFor Respondent: Shri Amol Khairnar CIT-DR

Section 143(3)Section 147Section 148Section 148ASection 151

Sahakarmaharshi Bhausaheb Thorat Sahakari Sakhar Karkhana Limited, Ahmednagar vs. Deputy Commissioner of Income Tax, Circle, Ahmednagar

In the result, appeal of the assessee is allowed

ITA 1653/PUN/2024[2017-18]Status: DisposedITAT Pune10 Mar 2025AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1653/Pun/2024 िनधा"रण वष" / Assessment Year: 2017-18 Sahakarmaharshi Bhausaheb V The Deputy Thorat Ssk Ltd., S Commissioner Of At Amrutnagar, P.O.Sangamner, Income Tax, Circle, Tal.Sangamner, Ahmednagar. Dist.Ahmednagar, Maharashtra – 422608. Pan: Aaaas3893G Appellant / Assessee Respondent / Revenue Assessee By Shri Mihir M. Bapat – Ar Revenue By Shri Ajay Kumar Keshari – Cit(Dr) Date Of Hearing 11/12/2024 Date Of Pronouncement 10/03/2025 आदेश/ Order Per Vinay Bhamore, Jm: This Appeal Filed By The Assessee Is Directed Against The Order Of Ld.Add.Commissioner Of Income Tax/Jcit(A)-8, Delhi U/S.250 Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’), Dated 15.06.2024 For A.Y.2017-18. “1. The A.O. Has Erred In Adding To Income Of Rs.15,54,94,967/- Being Excess Sugar Cane Price Paid To Members & Non Members. The Addition Made By The Assessing Officer Be Deleted.

Section 250Section 3Section 36(1)Section 36(1)(xvii)Section 4Section 5(1)Section 5(3)

relevant order. Ld.AR submitted that assessee has purchased sugar cane at a price of Rs.2,500/- per metric ton. Therefore, as per section 36(1)(xvii), the entire expenditure is allowable. However, ld.AR also submitted a written note which is reproduced as under : “Appellant is a co-operative sugar factory ... these laws are to be read together. Also it is to be noted that complying with both laws is mandatory on the assessee. Section 36(1)(xvii) provides that the amount of expenditure incurred by a co-operative society engaged in the business of manufacture of sugar for purchase

DCIT-4(1)(1), Mumbai vs. B Raheja Properties Private Limited, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 2677/MUM/2023[2015]Status: DisposedITAT Mumbai10 Mar 2025

Bench: Shri Saktijit Dey, Hon’Ble & Shri Girish Agrawalassessment Year: 2015-16

For Appellant: Shri Ravindra Poojary, AdvocateFor Respondent: Ms. Monika H. Pande, Sr. AR

Section 143(3)Section 36(1)(iii)Section 36(1)(ill)Section 40

fixed in nature and other wise. Merely not having revenue receipts cannot be the yard stick to decide allowability of the expenditure. Section 36(1)(iii) states that the amount of interest paid in respect of capital borrowed for the purpose of business or profession 7 B Raheja Proper ... specific purpose of purchasing a land for starting a new residential project. It claimed interest paid on such loan as deduction under section 36(1)(iii). The Assessing Officer disallowed same on ground that since no activity had commenced in said new project and land was were

Galaxy International Overseas, Dhuva, Wankaner vs. Income Tax Officer, Ward-1, Morbi

ITA 54/RJT/2024[2014-15]Status: DisposedITAT Rajkot07 Mar 2025AY 2014-15

Bench: Dr. Arjun Lal Saini, Am. & Dinesh Mohan Sinha, Jm आयकरअपीलसं./Ita No. 54/Rjt/2024 "नधा"रणवष" / Assessment Year: (2014-15) (Hybrid Hearing) Galaxy International Overseas Income Tax Officer, Vs. C/O. Sarda & Sarda, Cas, Ward – 1, 1St Floor, “Sakar”, Shakti Chambers, Nh27, Anand Dr. Radhakrishnan Road, Nagar, Opp. Rajkumar College, Morbi - 363642 Rajkot – 360001. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aacfg6749C (Appellant) (Respondent) Appellant By : Shri Vimal Desai, Ld. Ar Respondent By : Shri Sanjay Punglia, Ld. Cit(Dr) Date Of Hearing : 17/12/2024 Date Of Pronouncement : 07/03/2025

For Appellant: Shri Vimal Desai, Ld. ARFor Respondent: Shri Sanjay Punglia, Ld. CIT(DR)

Section 143(1)Section 143(3)Section 263Section 36(1)(iii)Section 44A

should not be added to the total income in your case for the year under consideration as per the provisions of Section 36(1)(iii) of the Income tax Act-1961 in absence of not a single plausible justification. The assessee has filed its reply dated 19/11/2019. The same ... Hero Cycles therefore, as a matter fact, it was to be held that such a nexus did not exist warranting any disallowance under section 36(1)(iii) of the Act; thirdly, there was clear and self-evident mutuality and business expediency in sizable inter-se transactions between the assessee

Oracle Granito Limited, Ahmedabad vs. The Dy.CIT, Circle-3(1)(2) Now Circle-3(1)(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 336/AHD/2024[2008-09]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2008-09

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumarassessment Year : 2008-09 Oracle Granito Limited The Dcit, Cir.3(1)(2) 206, Dev Arc, Second Floor Vs Now Cir.3(1)(1) Nr.Fun Republic Ahmedabad. Opp: Big Bazar S.G. Highway Road Ahmedabad 380 015. Pan : Aaaco 6238 P (Applicant) (Responent) : Assessee By Shri Aseem Thakkar, Ar Revenue By : Shri Amit Pratap Singh, Sr.Dr सुनवाई क" तारीख/Date Of Hearing : 09/01/2025 घोषणा क" तारीख /Date Of Pronouncement: 07/03/2025

For Respondent: Shri Amit Pratap Singh, Sr.DR

Section 143(3)Section 250Section 254Section 36(1)(iii)

ld.CIT(A) of disallowance of interest expenses amounting to Rs.10,43,063/- made by the AO in terms of provisions of section 36(1)(iii) of the Act. 4. This is the second round before the Tribunal. In the first round, the AO had noted that the interest attributable ... presumption is that the same fund has been deployed for investment in capital assets, calling for no disallowance of interest 4 under section 36(1)(iii) of the Act. In this regard, he drew our attention to the order of the Hon’ble Apex Court in the case

Ariba Technologies India Pvt Ltd, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Bengaluru

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

ITA 1587/BANG/2024[AY 2020-21]Status: DisposedITAT Bangalore07 Mar 2025

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Mr. Aliasgar Rampurawala, C.AFor Respondent: Ms. Nandini Das, CIT (DR)

Section 143(3)Section 144C(5)Section 92C

record. In the present cases, it is not in dispute that the assessee deposited the contribution of PF & ESI belatedly in terms of section 36(1)(va) of the Act. However, the said deposits were made prior to filing of return of income u/s 139(1

DCIT-2(3)(1), Mumbai vs. Nouveau Developers Private Limited, Mumbai

In the result, cross objection by the assessee is allowed for statistical purposes and appeal by Revenue is dismissed

ITA 2129/MUM/2024[2017-18]Status: DisposedITAT Mumbai06 Mar 2025AY 2017-18

Bench: Shri. Saktijit Dey, Hon’Ble & Shri. Girish Agrawalassessment Year: 2017-18 Deputy Commissioner Of Nouveau Developers Private Income-Tax-2(3)(1) Limited Mumbai. 702, Natraj, Mv Road, Junction, Vs. Western Express Highway, Andheri (East), Mumbai – 400069. (Pan: Aaccn5280G) (Appellant) (Respondent)

For Appellant: Shri. Naresh Kumar, ARFor Respondent: Ms. Monika H. Pande, SR. AR

Section 115JSection 143(3)Section 154Section 43CSection 50C

loan was obtained for the project of construction of flats, which is stock in trade, the assessee is entitled to deduction under section 36(1) (iii) of the Act in respect of interest expenditure on such loans. The Hon'ble Court further held that while adjudicating the claim of deduction ... under section 36(1) (iii) of the Act the nature of the expense, whether the expense was on capital account or revenue account was irrelevant, as the section itself says that interest paid by the assessee on capital borrowed is allowable as a deduction. 19. In the present case, undisputedly

DCIT 3(3) (1), Mumbai vs. M/S. Shapoorji Pallonji and Co. Pvt. Ltd, Mumbai

In the result, both the appeals of the assessee are partly allowed and cross objections are dismissed

ITA 2234/MUM/2021[2015-16]Status: DisposedITAT Mumbai06 Mar 2025AY 2015-16

Bench: Shri Amarjit Singh & Shri Rahul Chaudhary

For Appellant: Shri Rajan Vora a/w Shri Nikhil Tiwari & Ms. Palak MehtaFor Respondent: Shri Ajay Chandra, CIT/DR

Section 115JSection 14ASection 36(1)(iii)Section 92C

while computing the book profit in terms of provisions contained under section 115JB of the Act. C. Disallowance of notional interest expenditure under section 36(1)(iii) of the Act: Rs. 19,81,00,000 CO Nos. 53 & 54/Mum/2022 Shapoorji Pallonji and Co. Pvt. Ltd. 5. erred in challenging ... order of the Hon'ble CIT(A) with regard to disallowance of notional interest expenditure of Rs. 19,81,00,000 under section 36(1)(iii) of the Act, on the ground that interest bearing funds were advanced for non-business purposes without appreciating the fact that the Respondent

DCIT 3(3) (1), Mumbai vs. M/S. Shapoorji Pallonji and Co.Pvt. Ltd, Mumbai

In the result, both the appeals of the assessee are partly allowed and cross objections are dismissed

ITA 2232/MUM/2021[2016-17]Status: DisposedITAT Mumbai06 Mar 2025AY 2016-17

Bench: Shri Amarjit Singh & Shri Rahul Chaudhary

For Appellant: Shri Rajan Vora a/w Shri Nikhil Tiwari & Ms. Palak MehtaFor Respondent: Shri Ajay Chandra, CIT/DR

Section 115JSection 14ASection 36(1)(iii)Section 92C

Shapoorji Pallonji & Company Pvt. Ltd, Mumbai vs. DCIT Cir 3(3) (1), Mumbai

In the result, both the appeals of the assessee are partly allowed and cross objections are dismissed

ITA 2027/MUM/2021[2016-17]Status: DisposedITAT Mumbai06 Mar 2025AY 2016-17

Bench: Shri Amarjit Singh & Shri Rahul Chaudhary

For Appellant: Shri Rajan Vora a/w Shri Nikhil Tiwari & Ms. Palak MehtaFor Respondent: Shri Ajay Chandra, CIT/DR

Section 115JSection 14ASection 36(1)(iii)Section 92C

Shapoorji Pallonji and Company Pvt. Ltd, Mumbai vs. DCIT Cir 3(3) (1), Mumbai

In the result, both the appeals of the assessee are partly allowed and cross objections are dismissed

ITA 2026/MUM/2021[2015-16]Status: DisposedITAT Mumbai06 Mar 2025AY 2015-16

Bench: Shri Amarjit Singh & Shri Rahul Chaudhary

For Appellant: Shri Rajan Vora a/w Shri Nikhil Tiwari & Ms. Palak MehtaFor Respondent: Shri Ajay Chandra, CIT/DR

Section 115JSection 14ASection 36(1)(iii)Section 92C

M/S. Gajanan Cotspin, Buldhana vs. Income Tax Officer, Ward-2, Khamgaon

In the result, assessee’s appeal stands allowed

ITA 133/NAG/2023[2014-15]Status: DisposedITAT Nagpur05 Mar 2025AY 2014-15

Bench: Shri V. Durga Rao

For Appellant: Ms. Shristi PandyFor Respondent: Shri Abhay Y. Marathe

paid to creditors (against Unsecured Loans) up to the amount given interest free to Shri Govind N. Bhattad should not be disallowed under section 36(1)(iii) of the Income Tax Act, 1961 ("the Act") as the interest bearing fund utilized for non-business purpose. In response, the assessee furnished

The Asstt. Commissioner of Incometax, Central Circle-1(2), Ahmedabad vs. Ginger Properties Pvt. Ltd., Ahmedabad

In the result, the appeal of the Revenue is dismissed

ITA 483/AHD/2023[2019-20]Status: DisposedITAT Ahmedabad05 Mar 2025AY 2019-20

Bench: Ms. Suchitra Kamble & Shri Narendra Prasad Sinha

interest on borrowed funds which has been diverted towards interest free loans and advances and non-business investment is not admissible under Section 36(1)(iii) of the Act. Thus, the Assessing Officer added Rs.60,00,631/- on account of interest free loan under Section 36(1

Ginger Properties Private Limited, Ahmedabad vs. The Asstt. Commissioner of Incometax, Central Circle-1(2), Ahmedabad

In the result, the appeal of the Revenue is dismissed

ITA 433/AHD/2023[2019-20]Status: DisposedITAT Ahmedabad05 Mar 2025AY 2019-20

Bench: Ms. Suchitra Kamble & Shri Narendra Prasad Sinha

Ellora Construction Private Limited, Aurangabad vs. DCIT, Circle-1, Aurangabad

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

ITA 2163/PUN/2024[2018-19]Status: DisposedITAT Pune05 Mar 2025AY 2018-19

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2018-19 Ellora Construction Private Limited Dcit, Circle 1, Cidco Road, Azad Chowk, Vs. Aurangabad Aurangabad-431001 Pan: Aawca7578C (Appellant) (Respondent) Assessee By : Shri Suhas P Bora & Sampada Ingale Department By : Shri Ramnath P Murkunde Date Of Hearing : 04-03-2025 Date Of Pronouncement : 05-03-2025 O R D E R

For Appellant: Shri Suhas P Bora and Sampada IngaleFor Respondent: Shri Ramnath P Murkunde

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

debt as an irrecoverable write off without the appropriate treatment in the accounts, as well as non compliance with the conditions in section 36(1)(vii), 36(2) and explanation to section 36(1)(vii) would not entitle the appellant to claim a deduction. This position was reiterated again ... current period or any previous financial year. The appellant is obliged to prove to the AO that the case satisfies the ingredients of section 36(1)(vii) as well as section 36(2) of the IT Act. 4.3.3 As per the provisions of sub sec. (v) of sec. 36

M/S Tawari Traders, Buldhana vs. Income Tax Officer Ward -2, Khamgaon

In the result, appeal by the assessee stands dismissed

ITA 193/NAG/2019[2013-14]Status: DisposedITAT Nagpur04 Mar 2025AY 2013-14

Bench: Shri V. Durgarao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Rachit ThakkarFor Respondent: Shri Abhay Y. Marathe

Section 36Section 36(1)(iii)Section 40

CASS. The Assessing Officer concluded assessment determining total income of ` 11,79,787, by making addition of ` 9,20,513, as interest under section 36(1)(iii) of the Income Tax Act, 1961 ("the Act") and addition of ` 1,57,844, under section ... learned CIT(A), on the issue of disallowance of interest paid by the assessee of ` 9,20,513, under section 36(1)(iii) of the Act, while dealing with the issue, vide Para–7.0 to 7.4 / Page–11 to 13, held that interest amount attributable to the interest free advances

ACIT Circle 1 (1)&Tps, Mangaluru vs. M/S the South Canara District Central Co-Operative Bank Limited., Mangaluru

In the result, the appeal of the revenue is hereby dismissed

ITA 2333/BANG/2024[2018-19]Status: DisposedITAT Bangalore04 Mar 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Smt. Sheetal Borkar – AdvocateFor Respondent: Ms. Nandini Das, CIT (DR)

Section 145Section 22(1)

directed the assessee to provide for nonperforming assets, that direction cannot override the mandatory provisions of the Income-tax Act contained in section 36(1)(viia) which stipulate for deduction not exceeding 5 per cent of the total income only in respect of the provision for bad and doubtful debts ... which represent provision on regular/standard made as per RBI prudential norms for banks. 38. The AO held that the provision under section 36(1)(via) of the Act allows the claim of provision only in relation to bad and doubtful debts whereas regular/standard assets are not bad or doubtful debt

ACIT Circle 1(1) & Tps, Mangaluru vs. M/S the South Canara District Central Co-Operative Bank Limited, Mangaluru

In the result, the appeal of the revenue is hereby dismissed

ITA 2332/BANG/2024[2017-18]Status: DisposedITAT Bangalore04 Mar 2025AY 2017-18

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Smt. Sheetal Borkar – AdvocateFor Respondent: Ms. Nandini Das, CIT (DR)

Section 145Section 22(1)

ACIT Circle1(1)& Tps, Mangaluru vs. M/S South Kanara District Central Co-Operative Bank Ltd, Mangaluru

In the result, the appeal of the revenue is hereby dismissed

ITA 2331/BANG/2024[2016-17]Status: DisposedITAT Bangalore04 Mar 2025AY 2016-17

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Smt. Sheetal Borkar – AdvocateFor Respondent: Ms. Nandini Das, CIT (DR)

Section 145Section 22(1)