“interest on securities”

Chapter I - PreliminarySection 2 - DefinitionsSection 2(28B) / ITR Schedule OS681 judgments

The decision most relied on for interest on securities is South Indian Bank Ltd. v. CIT (438 ITR 1), cited in 508 judgments on BharatTax.

Leading authorities on interest on securities

South Indian Bank Ltd. v. CIT

438 ITR 1 · 2021 · Supreme Court

508

citing judgments

The mixed fund theory is affirmed, holding that no disallowance of interest expenditure under Section 14A can be made if the assessee possesses sufficient non-interest bearing funds, such as capital and reserves, to cover investments made in tax-free securities.

CIT v. Punjab State Cooperative Agricultural Development Bank Ltd.

389 ITR 68 · 2016 · High Court

192

citing judgments

Income earned by a cooperative society from investing its surplus funds in short-term deposits and securities is not attributable to its core activities and therefore not eligible for deduction under Section 80P(2)(a)(i) of the Income-tax Act.

CIT v. Microlabs Ltd.

383 ITR 490 · 2016 · High Court

175

citing judgments

If an assessee possesses interest-free funds exceeding investments in tax-free securities, it is presumed that investments are made from these own funds, precluding disallowance of interest expenditure under Section 14A read with Rule 8D(2)(ii). Additionally, weighted deduction under Section 35(2AB) is computed on the gross expenditure incurred, not net expenditure after reducing income earned.

CIT v. Southern Eastern Employees Cooperative Credit Society Ltd.

390 ITR 524 · 2017 · High Court

170

citing judgments

Income from surplus funds invested in short-term deposits and securities by a cooperative credit society is not attributable to its activities and is therefore not eligible for exemption under section 80P(2)(a)(i) of the Income-tax Act.

CIT v. Vijaya Bank

187 ITR 541 · 1991 · Supreme Court

116

citing judgments

The 'broken period interest' paid on securities is considered part of the capital outlay for acquiring those securities and cannot be allowed as a revenue expenditure or business deduction. It must be capitalized.

American Express International Banking Corporation v. CIT

258 ITR 601 · 2002 · High Court

citing judgments

Interest paid by banks is allowable as a deduction in computing total income. The decision distinguished the Supreme Court's ruling in Vijaya Bank regarding the deductibility of such interest.

CIT v. Moni Kumar Subba

333 ITR 38 · 2011 · High Court

citing judgments

Notional interest on an interest-free security deposit cannot be considered as actual or deemed rent under Section 23(1) of the Act. For determining Annual Letting Value (ALV) under Section 23(1)(a), it must be in accordance with municipal laws, considering extraneous circumstances, but not exceeding the standard rent as per rent control legislation.

1. Bihar State Co-operative Bank Ltd. v. CIT

39 ITR 114 · 1960 · Supreme Court

citing judgments

Interest income earned by a co-operative bank from the investment of its surplus funds, including those statutorily required to be placed in approved securities, is attributable to its banking business and qualifies for deduction under Section 80P(2)(a)(i).

Judgments citing interest on securities

M/S G.D. Tambi & Sons, Jaipur vs. ACIT, Circle-3, Jaipur

In the results, the appeal of the assessee in ITA no

ITA 177/JPR/2025[2016-17]Status: DisposedITAT Jaipur20 May 2025AY 2016-17

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Sh. P. C. Parwal, CAFor Respondent: Mrs. Anita Rinesh, JCIT-DR

Section 143(3)Section 24

namely :— in the case of dividends, 69[other than that referred in sub-clause (f) of (i) clause (22) of section 2] or interest on securities, any reasonable sum paid by way of commission or remuneration to a banker or any other person for the purpose of realising such dividend

M/S G.D. Tambi & Sons, Jaipur vs. ACIT, Circle-3, Jaipur

In the results, the appeal of the assessee in ITA no

ITA 176/JPR/2025[2015-16]Status: DisposedITAT Jaipur20 May 2025AY 2015-16

Bench: moving towards the facts of the case we would like to mention that the assessee has assailed the appeal for assessment year 2015-16 in

For Appellant: Sh. P. C. Parwal, CAFor Respondent: Mrs. Anita Rinesh, JCIT-DR

Section 143(3)Section 24

Chandrakant Viththal Bhopi, Raigad vs. ITO Ward 1, Panvel

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

ITA 2405/PUN/2024[2016-17]Status: DisposedITAT Pune07 May 2025AY 2016-17

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2016-17 Chandrakant Viththal Bhopi Ito, Ward-1, Panvel At Chinchpada, Post Panvel, Tal. Vs. Panvel, Dist. Raigad – 410206 Pan: Bjdpb7610L (Appellant) (Respondent) Assessee By : Shri Nikhil S Pathak & Ajinkya M Vaishampayan Department By : Shri Ramnath P Murkunde Date Of Hearing : 05-05-2025 Date Of Pronouncement : 07-05-2025 O R D E R

For Appellant: Shri Nikhil S Pathak &For Respondent: Shri Ramnath P Murkunde

Section 11Section 142(1)Section 147Section 148Section 148ASection 151Section 2(14)Section 28Section 56(2)(viii)

entire TDS has been deducted under the PAN of the assessee Shri Chandrakant Vithal Bhopi under section 184A which represents interest other than Interest on securities. The assessee failed to submit any documentary evidence and confirmation from the other members/co-owners about receipt of payment to the extent of their share

Dy. Commissioner of Income Tax, Mumbai vs. Sbi Life Insurance Company Limited, Mumbai

In the result, the Revenue's appeal for the

ITA 4247/MUM/2023[2020-2021]Status: DisposedITAT Mumbai05 May 2025AY 2020-2021

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhail

For Appellant: Shri Farooq IraniFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10Section 10(34)Section 14ASection 250Section 44

character of the income accrued to and claimed by assessee u/s 10(15) or 10(25) or as defined u/s 2(228) viz. interest on securities and income accrued to and claimed exempt by assessee u/s 10(38) viz. dividend is 'income from other sources' under provisions ... Whether the provisions of Section 44 of the IT Act overrides section relating to the computation of income chargeable under the head "Interest on securities", "Income from house property", "Capital Gains" or "Income from other sources", or in section 199 or in sections 28 to 43B?" 6. "Whether the nature

Dy. Commisioner of Income Tax, Mumbai vs. Sbi Life Insurance Co. Ltd., Mumbai

In the result, the Revenue's appeal for the

ITA 4208/MUM/2023[2018]Status: DisposedITAT Mumbai05 May 2025

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhail

For Appellant: Shri Farooq IraniFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10Section 10(34)Section 14ASection 250Section 44

Dy. Commissioner of Income Tax, Mumbai, Income Tax Department, DCIT vs. Sbi Life Insurance Company Ltd., Mumbai

In the result, the Revenue's appeal for the

ITA 4185/MUM/2023[2019]Status: DisposedITAT Mumbai05 May 2025

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhail

For Appellant: Shri Farooq IraniFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10Section 10(34)Section 14ASection 250Section 44

DCIT-1(3)(1), Mumbai vs. Sbi Life Insurance Company Ltd., Mumbai

In the result, the Revenue's appeal for the

ITA 1428/MUM/2023[2017-18]Status: DisposedITAT Mumbai05 May 2025AY 2017-18

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhail

For Appellant: Shri Farooq IraniFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10Section 10(34)Section 14ASection 250Section 44

DCIT-1(3)(1), Mumbai vs. Sbi Life Insurance Company Ltd., Mumbai

In the result, the Revenue's appeal for the

ITA 1427/MUM/2023[2016-17]Status: DisposedITAT Mumbai05 May 2025AY 2016-17

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhail

For Appellant: Shri Farooq IraniFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10Section 10(34)Section 14ASection 250Section 44

DCIT-1(3)(1), Mumbai vs. M/S Sbi Life Insurance Co. Ltd, Mumbai

In the result, the Revenue's appeal for the

ITA 1392/MUM/2023[2015-16]Status: DisposedITAT Mumbai05 May 2025AY 2015-16

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhail

For Appellant: Shri Farooq IraniFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10Section 10(34)Section 14ASection 250Section 44

The Kundara Panchayath Service Cooperative Bank Ltd, Kollam vs. Income Tax Officer, Ward-4, Kollam

In the result, appeals filed by the assessee are allowed

ITA 805/COCH/2024[2018-19]Status: DisposedITAT Cochin29 Apr 2025AY 2018-19

Bench: Shri Inturi Rama Rao & Shri Keshav Dubey

For Appellant: Shri G.Surendranath Rao, A.RFor Respondent: Smt. Leena Lal, Sr. D.R

Section 250Section 80PSection 8O

whole of such income. processing or facilitating the marketing of commodities; (f) A co-operative society other than The income by way of interest on securities and the income from house ITA Nos.802, 803 & 805/Coch/2024 The Kundara Panchayath Service Co-operative Bank Ltd., Kollam Page 7 of 14 Category

The Kundara Panchayath Service Cooperative Bank Ltd, Kollam vs. Income Tax Officer, Ward 4, Kollam

In the result, appeals filed by the assessee are allowed

ITA 803/COCH/2024[2017-18]Status: DisposedITAT Cochin29 Apr 2025AY 2017-18

Bench: Shri Inturi Rama Rao & Shri Keshav Dubey

For Appellant: Shri G.Surendranath Rao, A.RFor Respondent: Smt. Leena Lal, Sr. D.R

Section 250Section 80PSection 8O

The Kundara Panchayath Service Cooperative Bank Ltd, Kollam vs. Income Tax Officer, Ward 4, Kollam

In the result, appeals filed by the assessee are allowed

ITA 802/COCH/2024[2012-13]Status: DisposedITAT Cochin29 Apr 2025AY 2012-13

Bench: Shri Inturi Rama Rao & Shri Keshav Dubey

For Appellant: Shri G.Surendranath Rao, A.RFor Respondent: Smt. Leena Lal, Sr. D.R

Section 250Section 80PSection 8O

Ruparel Developers (India) Private Limited, Mumbai vs. Dy. Commissioner of Income Tax, TDS Circle 2(1), Mumbai

The appeal of the assessee is allowed

ITA 5925/MUM/2024[2017-18]Status: DisposedITAT Mumbai28 Apr 2025AY 2017-18

Bench: Shri Amit Shukla, Jm & Ms Padmavathy S, Am

For Appellant: Shri Vimal Punmiya, ARFor Respondent: 15.04.2025

Section 132Section 139Section 194ASection 201Section 201(1)

under section 194A does not arise. Therefore, before proceeding further we will look at the relevant provisions of section 194A " Interest other than "Interest on securities". 194A. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income ... interest other than income by way of interest on securities, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier

Pankaj Agarwal, Kanpur vs. Jt.CIT Circle-1(1)(1), Kanpur

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

ITA 267/LKW/2023[2012-13]Status: DisposedITAT Lucknow22 Apr 2025AY 2012-13

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2012-13 Pankaj Agarwal, 7/151, Ratan Vs. The Jt. Commissioner Of Majestic, Opp. Sony World, Income Tax, Circle 1(1)(1), Swaroop Nagar, Kanpur-208002 Kanpur-208001 Pan:Abjfs4912R (Appellant) (Respondent) Assessee By: Sh. Rakesh Garg, Adv Revenue By: Sh. Sanjeev Krishna Sharma Sr Dr & Sh Sunil Kumar Rajwanshi, Addl Cit Dr Date Of Hearing: 10.02.2025 Date Of Pronouncement: 22.04.2025 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Order Passed By The Ld. Cit(A), Nfac Under Section 250 Of The Income Tax Act, 1961 On 21.08.2023. The Grounds Of Appeal Are As Under:- “1. Because The Cit (A) Has The Erred On Facts & In Law In Upholding The Disallowance Of Rs.2,47,02,865/- On Account Of Loss In Trading In Derivatives Business Treating The Same As Capital Loss, As Against Assessee'S Claim Of Business Loss, To Be Set Off Against Other Business Income, Which Order Is Contrary To Facts, Bad In Law, The Disallowance Made By The Ao & Upheld Be Deleted. 2. Because On A Proper Consideration Of The Facts & Circumstances Of The Case & Also On The Interpretation Of The Provisions Of Sec 43(5), It Would Be Found The Loss Of Rs.2,47,02,865/- On Account Of Trading In Derivative Is Neither A Speculative Loss Nor A Capital Loss, The Same Should Ought To Be Set Off Against Other Business Income, The Cit (A) Has Erred, In Treating The Same As Short Term Capital Loss.

For Appellant: Sh. Rakesh Garg, AdvFor Respondent: Sh. Sanjeev Krishna Sharma Sr DR & Sh

Section 14ASection 250Section 43(5)Section 72

grounds that the Assessee had not shown any expenditure against the exempt income earned from dividends, exempt capital gains, interest on PPF and interest on securities and her belief that there was always some hidden expenditure involved in the form of processing fees, surrender charges, brokerage and handling charges which

Assistant Commissioner of Income Tax, Circle 1, Income Tax Department vs. Manorama Coop Bank Ltd, Solapur

In the result, the appeal filed by the Revenue is dismissed

ITA 2157/PUN/2024[2013-14]Status: DisposedITAT Pune22 Apr 2025AY 2013-14

Bench: Shri Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.2157/Pun/2024 िनधा"रण वष" / Assessment Year : 2013-14 Acit, Cricle-2, Solapur. Vs. Manorama Co-Op. Bank Ltd., Plot 4, 5, 6 Vijapur Road, Indiranagar S.O., Maharashtra- 413004. Pan : Aajfm6823C Appellant Respondent Revenue By : Ms. Shilpa N. C. Assessee By : Shri Pramod S. Shingte Date Of Hearing : 22.01.2025 Date Of Pronouncement : 22.04.2025 आदेश / Order Per Vinay Bhamore, Jm: This Appeal Filed By The Revenue Is Directed Against The Order Dated 15.07.2024 Passed By Ld. Cit(A)/Nfac For The Assessment Year 2013-14. 2. The Revenue Has Raised The Following Grounds Of Appeal :- “1) The Ld Cit(A), Nfac Has Erred In Admitting This Exemption U/S 194A (3)(V) To The Assessee For Non-Deduction Of Tds On Interest Credits Of Nominal Members Who Are Not Actual Member As Per Definition Of Person Who Is Eligible For Membership As Per Clause

For Appellant: Shri Pramod S. ShingteFor Respondent: Ms. Shilpa N. C

Section 143(2)Section 143(3)Section 147Section 148Section 194ASection 194A(3)(v)Section 40

source u/s.194A of the Act. 5. Section 194A of the Act deals with deduction of tax at source on Interest other than interest on securities. Sub-section (1) provides that any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident

Dy. Commissioner of Income Tax, Circle-1(1), Hyderabad vs. Union Bank of India, Hyderabad

In the result, the appeal of revenue is partly allowed for statistical

ITA 316/HYD/2019[2015-16]Status: DisposedITAT Hyderabad21 Apr 2025AY 2015-16

For Appellant: Shri S. Ananthan, C.A. &For Respondent: Ms. M Narmada, CIT-DR

Section 143(3)Section 14ASection 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)Section 36(1)(vila)

should be withdrawn. A reading of this circular would make it clear that the issue was as to whether income by way of interest on securities shall be chargeable to income tax under the head ‘income from other sources' or it is to fall under the head ‘profits and gains

Union Bank of India (Erstwhile-Andhra Bank), Mumbai vs. Dy. Commissioner of Income Tax, Circle-1(1), Hyderabad

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

ITA 193/HYD/2019[2015-16]Status: DisposedITAT Hyderabad21 Apr 2025AY 2015-16

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri S. Ananthan, C.A. &For Respondent: Ms. M Narmada, CIT-DR

Section 143(3)Section 14ASection 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)Section 36(1)(vila)

should be withdrawn. A reading of this circular would make it clear that the issue was as to whether income by way of interest on securities shall be chargeable to income tax under the head ‘income from other sources’ or it is to fall under the head ‘profits and gains

Assistant Commissioner of Income Tax, C-1(1)(1), Bangalore vs. Bangalore International Airport Limited, Bangalore

In the result, the cross objection of the assessee is hereby partly allowed

ITA 1109/BANG/2024[2020-21]Status: DisposedITAT Bangalore16 Apr 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Smt. Nandini Das, CIT-DR

Section 80I

maintenance of impugned infrastructure facility of airport. The assessee further contended that the interest income from income tax refund, interest on securities deposit and government grant of Rs. 4,42,46,535/-, Rs. 60,78,788/- and Rs. 11,10,03,421/- respectively which are included under the head other ... includes following income: (i) Interest on Income tax refund Rs. 4,42,46,535/- (ii) Government Grant Rs. 11,10,03,421/- (iii) Interest on security deposit Rs. 60,78,788/- (iv) Interest income Rs. 33,93,27,137/- (v) Tender fee Rs. 1,44,68,813/- (vi) Others

Assistant Commissioner of Income Tax, C-1(1)(1), Bangalore vs. Bangalore International Airport Limited, Bangalore

ITA 1108/BANG/2024[2018-19]Status: DisposedITAT Bangalore16 Apr 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Smt. Nandini Das, CIT-DR

Section 143(4)Section 80I

maintenance of impugned infrastructure facility of airport. The assessee further contended that the interest income from income tax refund, interest on securities deposit and government grant of Rs.4,42,46,535/-, Rs.60,78,788/- and Rs. 11,10,03,421/- respectively which are included under the head other income ... impugned amount includes following income: (i) Interest on Income tax refund Rs.4,42,46,535/- Government Grant (ii) Rs.11,10,03,421/- (iii) Interest on security deposit Rs.60,78,788/- (iv) Interest income Rs.33,93,27,137/- (v) Tender fee Rs.1,44,68,813/- (vi) Others Rs.1

Ranjeet Singh Saini, Raipur vs. Income Tax Officer, Ward-3(1), Raipur

Appeal of the assessee is partly allowed for statistical purposes, in terms of over aforesaid observations

ITA 58/RPR/2025[2018-19]Status: HeardITAT Raipur09 Apr 2025AY 2018-19

Bench: Shri Partha Sarathi Chaudhury, Jm & Shri Arun Khodpia, Am आयकर अपील सं. / Ita No: 58/Rpr/2025 (िनधा"रण वष" Assessment Year: 2018-19)

For Appellant: Shri Veekaas S Sharma, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 143(3)Section 144Section 147Section 148Section 148ASection 250

Management Strategy formulated by the Board, the assessee had made cash deposits in Bank accounts of Rs. 65,80,000/-, Interest other than interest on securities of Rs.20,00,000/-, Investment in the form of Time Deposits Rs.17,33,500/-, consideration in lieu of sale of immovable property