“Section 36(1)(ii)”

Section References (mined)Section 36Section 36(1)(ii)167 judgments

The decision most relied on for Section 36(1)(ii) is CIT v. Bharat Hotels Ltd. (410 ITR 417), cited in 486 judgments on BharatTax.

Leading authorities on Section 36(1)(ii)

CIT v. Bharat Hotels Ltd.

410 ITR 417 · 2019 · High Court

486

citing judgments

Employee contributions to provident fund and ESI, if paid beyond the due date prescribed by the respective welfare fund statutes, are not allowed as a deduction under the Income Tax Act.

CIT v. Yokogawa India Ltd.

341 ITR 385 · 2012 · High Court

270

citing judgments

A provision for doubtful debts cannot be added back while computing book profits under Section 115JB of the Income-tax Act for Minimum Alternate Tax (MAT) purposes.

Munjal Sales Corporation v. CIT

298 ITR 298 · 2008 · Supreme Court

191

citing judgments

The Supreme Court approves the mixed fund theory, holding that no interest disallowance is warranted under section 36(1)(iii) if investments or advances are made from the assessee's own non-interest bearing funds, even when mixed funds are available. This presumption applies when non-interest bearing funds are sufficient to meet the investments.

Sonia Bhatia v. State of U.P

2 SCC 585 · 1981 · Reported

190

citing judgments

An Explanation to a statutory provision can either clarify an existing ambiguity in the main provision or add to and widen its scope.

CIT v. S.G. Pgnatale

124 ITR 391 · 1980 · High Court

181

citing judgments

An Explanation to Section 9(1)(ii) of the Income Tax Act that widens the scope of the provision, rather than merely clarifying it, cannot be applied retrospectively to assessment periods prior to its effective date. Assessments must be made according to the law in force at the relevant time.

CIT v. UTI Bank Ltd.

32 Taxmann.com 370 · 2013 · High Court

131

citing judgments

If an assessee possesses sufficient interest-free funds, it is presumed that investments yielding exempt income were made from these funds, therefore disallowance of interest expenditure under Section 14A is not justified.

CIT v. Goslino Mario

241 ITR 312 · 2000 · Supreme Court

119

citing judgments

The law applicable for an assessment year is that in force during that year, and an Explanation introduced with effect from a particular date does not retrospectively affect earlier assessment years unless expressly provided.

Madras Industrial Investment Corpn. Ltd. v. CIT

91 Taxmann 340 · 1997 · Supreme Court

citing judgments

The Supreme Court held that discount on the issue of debentures is a deductible expenditure that can be spread proportionately over the period for which the debentures remain outstanding, rather than being claimed entirely in the year of issue. This treatment acknowledges the enduring benefit derived from the funds raised through debentures.

Judgments citing Section 36(1)(ii)

DCIT, CC-7(2), Mumbai vs. M/S. Patanjali Foods Ltd., ( Formerly Known As Ruchi Soya Industries Ltd, Mumbai

In the result the appeal filed by the revenue stands dismissed

ITA 1173/MUM/2023[2011-12]Status: DisposedITAT Mumbai17 Sept 2025AY 2011-12

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

Section 132Section 143(3)Section 153ASection 250Section 37(1)

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER

Prem Chand Singh, Chatra vs. Pr.CIT, Dhanbad

The appeal of the assessee is allowed for statistical purposes

ITA 351/RAN/2024[2017-18]Status: DisposedITAT Ranchi11 Sept 2025AY 2017-18

Bench: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahayi.T.A. No.107/Ran/2024 Assessment Year: 2018-19 Pravin Engineering Pvt. Ltd.......................…...........................……….……Appellant Plot No.6A, Phase-1, Industrial Area, Adityapur, Jharkhand - 832109. [Pan: Aabcp0358E] Vs. Acit, National E-Assessment Centre, New Delhi.……........……...…..…..Respondent Appearances By: None Appeared On Behalf Of The Appellant. Shri Khubchand T. Pandya, Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : September 10, 2025 Date Of Pronouncing The Order : September 11, 2025 Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Assessee Against An Order Dated 28.02.2024 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. Brief Facts Of The Case Are That The Assessee Is A Company & Filed Its Return Of Income For The Assessment Year 2018-19 Declaring Total Income Of Rs.73,21,980/-. The Case Of The Was Selected For Scrutiny & The Assessing Officer Completed The Assessment U/S 143(3) Of The Act Assessing Total Income Of The Assessee At Rs.84,67,210/-. During The Assessment Proceedings, The Assessing Officer Pointed Out That The Tax Audit Report Has Identified That The Assessee Paid Its Directors A Sum Of Rs.11,36,000/- As Bonus Or Commission Which Was Otherwise Payable As Profits Or Dividend & This Amount Was Covered By Section 36(1)(Ii) Of The Act. The Assessing Officer Disallowed The Claim Of Commission As Claimed By The Assessee.

Section 143(3)Section 250Section 36(1)(ii)

Rs.11,36,000/- as bonus or commission which was otherwise payable as profits or dividend and this amount was covered by section 36(1)(ii) of the Act. The Assessing Officer disallowed the claim of commission as claimed by the assessee. I.T.A. No.107/Ran/2024 Pravin Engineering Pvt. Ltd. 3. Dissatisfied with ... commission paid to an employees for serves rendered, where such sum was otherwise payable to him as profits or dividends as per section 36(1)(ii) of the Act and the said sum is not a part of profits or dividends as stated in section 36(1)(ii

Pravin Engineering Private Limited, Jamshedpur vs. ACIT, National E-Assessment Centre

The appeal of the assessee is allowed for statistical purposes

ITA 107/RAN/2024[2018-2019]Status: DisposedITAT Ranchi11 Sept 2025AY 2018-2019

Section 143(3)Section 250Section 36(1)(ii)

DCIT, C-V, Ludhiana vs. M/S Hero Cycles Ltd., Ludhiana

In the result, appeal of the Department is dismissed and the appeal of the assessee is allowed

ITA 588/CHANDI/2018[2012-13]Status: DisposedITAT Chandigarh08 Sept 2025AY 2012-13

Bench: SHRI. RAJPAL YADAV (Vice President), SHRI. KRINWANT SAHAY, AM आयकर अपील सं. / ITA No. 588/Chd/2018 निर्धारण वर्ष / Assessment Years : 2012-13 The DCIT C-V, Ludhiana बनाम M/s Hero Cycles Ltd. Hero Nagar, G.T. Road Ludhiana स्थायी लेखा सं./PAN NO: AAACH4073P अपीलार्थी/Appellant प्रत्यर्थी / Respondent आयकर अपील सं. / ITA No. 473/Chd/2018 निर्धारण वर्ष / Assessment Years : 2012-13 M/s Hero Cycles Ltd. Hero Nagar, G.T. Road Ludhiana बनाम The ACIT C-V, Ludhiana स्थायी लेखा सं./PAN NO: AAACH4073P

For Appellant: Shri Ashwani Kumar, Shri Ashish Aggarwal &For Respondent: Shri Manav Bansal, CIT, DR

Section 10(38)Section 143(1)Section 14ASection 36(1)(iii)

allowable as business expenditure if it was incurred on grounds of commercial expediency To consider whether one should allow deduction under section 36(1)(ii) of interest paid by the assessee on amounts borrowed by it for advancing to a sister concern, the authorities and the courts should examine ... without any business purpose, the interest to the extent the advance had been made without carrying any interest is to be disallowed under section 36(1)(ii) of the Act." 7.5 For the assessee's argument that interest only from one unit should be considered, it can be said that

M/S Hero Cycles Ltd., Ludhiana vs. ACIT, C-V, Ludhiana

ITA 473/CHANDI/2018[2012-13]Status: DisposedITAT Chandigarh08 Sept 2025AY 2012-13

For Respondent: Shri Ashwani Kumar, Shri Ashish Aggarwal &

Section 10(38)Section 143(1)Section 14ASection 36(1)(iii)

आयकर अपीलीय अधिकरण, चण्डीगढ़ न्यायपीठ “ए”, चण्डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL

Ponnusamy Raja, Vakkil New Street, Madurai vs. Income Tax Officer, Non-Corporate Ward 1(7), Madurai, Income Tax Office, Cr Building

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

ITA 1677/CHNY/2025[2018-2019]Status: DisposedITAT Chennai02 Sept 2025AY 2018-2019

Bench: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunathaआयकर अपील सं./I.T.A. No.1677/Chny/2025 िनधा"रण वष"/Assessment Year: 2018-19 Ponnusamy Raja, Vs. The Income Tax Officer, No. 176-A, 3Rd Floor, Vakkil New Street, Non Corporate Ward 1(7), Simmakal, Madurai 625 001. Madurai. [Pan:Agepr6307F] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri T. Vasudevan, Advocate ""थ" की ओर से/Respondent By : Shri N. Rajakumar, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 26.08.2025 घोषणा की तारीख /Date Of Pronouncement : 02.09.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Assessee Is Directed Against The Order Dated 04.03.2025 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Year 2018-19. 2. We Find That This Appeal Is Filed With A Delay Of 9 Days. The Assessee Filed An Affidavit For Condonation Of Delay Stating The Reasons. Upon Hearing Both The Parties & On Examination Of The Said Affidavit, We Find The Reasons Stated By The Assessee Are Bonafide, Which Really

For Appellant: Shri T. Vasudevan, AdvocateFor Respondent: Shri N. Rajakumar, Addl. CIT

Section 36(1)(ii)Section 44A

audit report, the Assessing Officer noted mismatch in amount paid to 3 I.T.A. No.1677/Chny/25 employees as bonus or commission under section 36(1)(ii) of the Act. The assessee submitted before the Assessing Officer that the bonus amount of ₹.2,26,000/- was wrongly reported in tax audit report

Ideal Energy Projects Limited, Nagpur vs. Central Circle 5(3), Mumbai

In the result, the appeal by the assessee is allowed

ITA 3343/MUM/2025[2012-2013]Status: DisposedITAT Mumbai21 Aug 2025AY 2012-2013

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhailideal Energy Projects Limited., Plot No.1601, 5Th Floor, Gupta Tower, Science College Road, Civil Lines, Nagpur, Mumbai - 440001 ............... Appellant Pan : Aabci8643M V/S Deputy Commissioner Of Income Tax, Central Circle – 5(3), ……………… Respondent Room No.426, 4Th Floor, Kautilya Bhavan, C- Block, Bandra Kurla Complex, Bandra East, Mumbai Assessee By : Shri Hitesh P. Shah (Virtually Appear) Revenue By : Mr. Virabhadra S. Mahajan, Cit-Dr

For Appellant: Shri Hitesh P. Shah (Virtually appear)For Respondent: Mr. Virabhadra S. Mahajan, CIT-DR

Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 250Section 271(1)(c)Section 36(1)(iii)Section 57

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL

Income Tax Officer, Delhi vs. Rakhee Walech, Delhi

In the result, Appeal of the Revenue is partly allowed for

ITA 5987/DEL/2024[2017-18]Status: DisposedITAT Delhi29 Jul 2025AY 2017-18

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwali.T.A. No. 5987/Del//Del/2024 (A.Y 2017-18) Income Tax Officer Vs Rakhee Walecha, Room No. 1210, E-2, Block, Civic 455, Mandakini Enclave, Centre, New Delhi Alaknanda, New Delhi Pan: Aaipw4418J Appellant Respondent Assessee By Sh. Anuj Tiwari, Ca Revenue By Sh. Ajay Kumar Arora, Sr. Dr Date Of Hearing 16/07/2025 Date Of Pronouncement 29/07/2025

Section 36(1)(ii)Section 68

1 ITA No. 5987/Del/2024 ITO VS. Rakhee Walech IN THE INCOME TAX APPELLATE TRIBUNAL DELHI [ DELHI BENCH : “A” NEW DELHI

Portescap India Private Limited, Mumbai vs. DCIT Circle 2(3)(1), Mumbai

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

ITA 6749/MUM/2024[2021-22]Status: DisposedITAT Mumbai28 Jul 2025AY 2021-22

Bench: Smt. Beena Pillai () & Shri Girish Agrawal ()

Section 143(3)Section 153Section 92C(3)

IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) AND SHRI GIRISH AGRAWAL (ACCOUNTANT

Corona Steel Industry Pvt. Ltd., Kolkata vs. DCIT, Central Circle 3(3), Kolkata

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

ITA 2531/KOL/2024[2021-2022]Status: DisposedITAT Kolkata22 Jul 2025AY 2021-2022

Bench: SHRI DUVVURU RL REDDY (Vice President)

For Appellant: Shri Arvind Agrawal, ARFor Respondent: Shri susanta Saha, Addl. CIT-Sr.DR

Section 143(1)Section 154Section 36(1)(ii)

stating that in the given facts and circumstances and as per the audited accounts and tax audit report, the provision of Section 36(1)(ii) of the Act was not applicable and that the delay in depositing of ESI & PF was added back in the computation of Income. However ... ground that the 3 amount of Rs.3,04,518/- paid to its employees as bonus does not fall under the provisions of Section 36(1)(ii) of the Act. Looking to the facts and circumstances of the case and as the assessee failed to submit any documentary evidence in regard

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

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS PADMAVATHY S, AM & SHRI RAJ KUMAR CHAUHAN, JM I.T.A

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

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS PADMAVATHY S, AM & SHRI RAJ KUMAR CHAUHAN, JM I.T.A

Jurimatrix Services India Private Limited, Bengaluru vs. Assistant Commissioner of Income Tax, Circle 4(3)(1), Bengaluru

ITA 92/BANG/2025[2018-19]Status: DisposedITAT Bangalore15 Jul 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Sri K.R. Girish, A.RFor Respondent: Ms. Neha Sahay, D.R

Section 10ASection 115JSection 144Section 156Section 234ASection 234BSection 263Section 270A

ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL "A"BENCH: BANGALORE BEFORE SHRI WASEEM

The Asst. CIT., Circle-1(1), Baroda vs. Ambalal Sarabhai Enterprises Limited, Baroda

In the result, the appeal is allowed for statistical purposes

ITA 2033/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad08 Jul 2025AY 2012-13

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, A.RFor Respondent: Shri Alpesh Parmar, CIT DR &

Section 115JSection 14ASection 50

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER

Ambalal Sarabhai Enterprises Limited, Baroda vs. The Dy.CIT., Circle-1(1), Baroda

In the result, the appeal is allowed for statistical purposes

ITA 1807/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad08 Jul 2025AY 2012-13

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, A.RFor Respondent: Shri Alpesh Parmar, CIT DR &

Section 115JSection 14ASection 50

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER

Morni Sarees Private Limited, Indore vs. Asst. Director of Income Tax, CPC, Bengaluru

In the result, the order of the CIT(A) is set aside, and the appeal of the assessee is partly allowed”

ITA 910/IND/2024[2021-22]Status: DisposedITAT Indore07 Jul 2025AY 2021-22

Bench: Shri B.M. Biyani & Shri Paresh M Joshi

Section 143(1)Section 154Section 246ASection 250Section 253Section 36Section 43B

reversed by order u/s 154 dated 24.02.2023 save and except that it was unnecessary for the Ld. CIT(A) to have inserted Section 36(1)(ii) r.w.s. 43B. The original disallowance was under Section 36(1)(ii) of bonus as per “impugned intimation order” and that Section 43B was nowhere ... picture. Our attention was drawn to following:- “ As per Section 36(1)(ii) of the Act, any sum paid to an employee as bonus or commission for services rendered, shall be allowed as deduction. But in this case, the bonus amount of Rs.9,59,000/- is shown as Bonus payable

Gayatri Energy Ventures Private Limited, Hyderabad vs. ACIT., Circle-2(1), Hyderabad

In the result, appeal of the Assessee is allowed

ITA 467/HYD/2025[2018-19]Status: DisposedITAT Hyderabad07 Jul 2025AY 2018-19

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA KC Devdas & CA Swapnil DeshukhFor Respondent: Shri B Bala Krishna, CIT-DR

increasing financial assets despite the appellant company was engaged in the business to development, Construction and operation of power. The bare reading of Section 36(1)(ii) is as follows : "36(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with ... interest" in Section 2(28A) means "interest payable in any manner in respect of any moneys borrowed or debt incurred". But for Section 36(1)(ii), "interest" is restricted to that on money borrowed and not on debt incurred. In simple words, the essence of interest is that

Morni Sarees Private Limited, Indore vs. Asst. Director of Income Tax, Income Tax Department

ITA 909/IND/2024[2020-21]Status: HeardITAT Indore24 Jun 2025AY 2020-21

Bench: Shri Bhagirath Mal Biyani & Shri Paresh M Joshi

Section 143(1)Section 154Section 246ASection 250Section 253Section 36Section 43B

आयकर अपीलीय अधिकरण, इंदौर न्यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI BHAGIRATH MAL BIYANI

ACIT-6(1)(2), Mumbai vs. J M Financial Properties and Holdings Limited, Mumbai

ITA 1396/MUM/2025[2014-15]Status: DisposedITAT Mumbai28 May 2025AY 2014-15

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Dr.K. Shivaram Sr.AdvocateFor Respondent: Ms. Kavita P. Kaushik

Section 143(3)Section 250Section 28Section 36Section 36(1)(ii)Section 36(1)(iii)

case and in law, the Ld. CIT(A) failed to appreciate the fact that the AO has rightly invoked the provisions of Section 36(1)(ii) and made disallowance of interest expenditure whereas the said expenditure claimed to have been incurred is not a prudent transaction.” 4. The relevant facts

ACIT-6(1)(2), Mumbai vs. J M Financial Properties and Holdings Limited, Mumbai

ITA 1389/MUM/2025[2013-14]Status: DisposedITAT Mumbai28 May 2025AY 2013-14

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Dr.K. Shivaram Sr.AdvocateFor Respondent: Ms. Kavita P. Kaushik

Section 143(3)Section 250Section 28Section 36Section 36(1)(ii)Section 36(1)(iii)