“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

Nirmala Sharma, Gangtok vs. I.T.O., Ward - 3(1), Gangtok

In the result, both the appeals filed by the assessee as well as the Revenue are allowed for statistical purposes

ITA 2227/KOL/2024[2018-2019]Status: DisposedITAT Kolkata13 Feb 2025AY 2018-2019

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 10Section 147Section 250Section 69

individual is exempt from tax: 1. Income from any source in the state of Sikkim; or 2. Income by way of dividend or interest on securities. 2.1 It has further been provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or after the first ... income which accrues or arises to him— (a) from any source in the State of Sikkim; or (b) by way of dividend or interest on securities. Explanation.—For the purposes of this clause "Sikkimese" shall mean— (i) an individual, whose name is recorded in the register maintained under the Sikkim

Dhanlaxmi Credit Co. Op. Society Ltd., Mehsana vs. The ITO, Ward-2, Patan

In the result, Ground Number 3 of the appeal of the assessee is allowed

ITA 1870/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad11 Feb 2025AY 2017-18

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri M. K. Patel, A.RFor Respondent: Shri V K Mangla, Sr. DR

Section 263Section 80PSection 80P(2)(c)Section 80P(2)(d)

appears that it provides for exemption from deducting Tax Deducted at Source ['TDS' for short] from the income on interest other than interest on securities as the cooperative societies other than cooperative banks meaning thereby that the cooperative banks are liable to deduct TDS from the interest other than interest

DCIT-CC-5(3), Mumbai, Bkc vs. Icici Lombard General Insurance Co Ltd, Mumbai

In the result, both the revenue's appeals ITA No

ITA 3845/MUM/2024[2013-14]Status: DisposedITAT Mumbai10 Feb 2025AY 2013-14

Section 10(15)Section 10(34)Section 10(38)Section 143(1)Section 143(2)Section 250Section 44

years has categorically held that assessee's claim of exemption relating to profit on sale of shares and securities is allowable u/s.10(38), interest on securities is allowable u/s.10(15) and dividend on shares is allowable u/s.10(34) of the Act. We find that all the issue in dispute under ... Long term capital gain and short term capital gain out of sale of shares and securities of ₹ 215,89,01,045, (ii) interest on securities of 21,23,56,066; (iii) dividend on shares of 8,13,33,370. However, the Assessing Officer has disallowed assessee's claim of exemption

DCIT-CC5(3), Mumbai vs. Icici Lombard General Insurance Co Ltd, Mumbai

In the result, both the revenue’s appeals ITA No

ITA 3841/MUM/2024[2014-15]Status: DisposedITAT Mumbai10 Feb 2025AY 2014-15

Bench: SHRI BR BASKARAN (Accountant Member), SHRI SUNIL KUMAR SINGH (Judicial Member)

Section 10(15)Section 10(34)Section 10(38)Section 143(1)Section 143(2)Section 250Section 44

categorically held that assessee’s claim of exemption relating to profit on sale of shares and securities is allowable u/s. 10(38), interest on securities is allowable u/s. 10(15) and dividend on shares is allowable u/s. 10(34) of the Act. We find that all the issue in dispute ... Long term capital gain and short term capital gain out of sale of shares and securities of ₹ 215,89,01,045, (ii) interest on securities of ₹ 21,23,56,066; (iii) dividend on shares of 8,13,33,370. However, the Assessing Officer has disallowed assessee's claim of exemption

Baroda Rajasthan Kshetriya Gramin Bank, Ajmer vs. Dy. CIT (ACIT) Circle -2 Ajmer, Cr Building, Opp. Session Court, Jaipur Road, Ajmer

In the result, the appeal of the assessee is dismissed

ITA 635/JPR/2024[2020-21]Status: DisposedITAT Jaipur06 Feb 2025AY 2020-21

Bench: Shri Gagan Goyal & Shri Narinder Kumarbaroda Rajasthan Kshetriya Gramin Bank, 2343 Rajasthan Patrika Building, Vaishali Nagar, Ajmer – 305004 Pan No. Aaajb1164C ...... Appellant

For Appellant: Mr. Shailesh Mantri, CA, Ld. ARFor Respondent: Mr. Arvind Kumar, CIT, Ld. DR

Section 22Section 23ASection 250Section 32Section 36(1)Section 43BSection 80PSection 80P(2)(a)Section 80P(4)

power, where the gross total income does not exceed twenty thousand rupees, the amount of any income by way of interest on securities or any income from house property chargeable under section 22. Explanation. —For the purposes of this section, an "urban consumers' co-operative society" means a society

Atele Vasa, Kohima vs. ITO-W-1, Dimapur

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

ITA 54/GTY/2024[2017-18]Status: DisposedITAT Guwahati31 Jan 2025AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) & Shri Rakesh Mishrai.T.A. No. 54/Gau/2024 Assessment Year: 2017-2018 Atele Vasa,………………………….......…………Appellant Kohima, Midland Kohima Sardar, Nagaland, Pin Code No.797001 [Pan:Akupv8688B] -Vs.- Income Tax Officer,…..………………………...Respondent Ward-1, Dimapur, Income Tax Office, Kalibai Road, Dimapur-797112, Nagaland Appearances By: Shri C. Roy, Ca, Appeared On Behalf Of The Assessee Shri Kausik Ray, Jcit, Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: December 24, 2024 Date Of Pronouncing The Order: January 31, 2025 O R D E R

Section 10(26)Section 133(6)Section 144Section 69A

assessee from any source in the States of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura or by way of dividend or interest, on securities. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer, which was made under section 69A of the Act. 8. On the other ... which accrues or arises to him.,- (a) From any source in the areas, or States aforesaid, or (b) By way of dividend or interest on securities. 10. After considering the section 10(26) of the Act, the burden lies on the assessee to establish that the income accrues or arises

Mayurakshi Gramin Bank Employees Provident Fund, Pbgb Regional, Suri, Birbhum vs. D.C.I.T., Circle - 3, Suri, Birbhum

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

ITA 1159/KOL/2024[2015-2016]Status: DisposedITAT Kolkata31 Jan 2025AY 2015-2016

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) I.T.A. No. 1159/Kol/2024 Assessment Year: 2015-2016 Mayurakshi Gramin Bank Employees Provident Fund,………………………………………Appellant Pbgb Regional, Suri Birbhum-731101, West Bengal [Pan:Aabtm2580Q] -Vs.- Deputy Commissioner Of Income Tax,……...Respondent Circle-3, Suri, Aayakar Bhawan, Lalkuthipara, Suri, Birbhum-731101, W.B. Appearances By: Shri S.K. Tulsian, Advocate & Ms. Lata Goyal, Ca, Appeared On Behalf Of The Assessee Shri Subhro Das, Addl. Cit, Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: January 23, 2025 Date Of Pronouncing The Order: January 31, 2025 O R D E R

Section 10Section 10(25)Section 10(25)(ii)Section 139Section 143(3)Section 254

additional ground is concerned, for the sake of convenience, we reproduce the section 10(25) of the Act, which reads as under:- (i) interest on securities which are held by, or are the property of, any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies

Shree Sarvodaya Sahakari Mandali Ltd., Vadodara vs. NFAC, Delhi Present Jurisdiction the Dy.CIT, Circle-2(1)(1), Vadodara

In the result, both the appeals of the assessee are allowed

ITA 1349/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad24 Jan 2025AY 2017-18

Bench: Dr.Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Viranch Modi, A.RFor Respondent: Ms. Ketaki Desai, Sr. DR

Section 143(3)Section 147Section 80Section 80PSection 80P(2)(d)

cooperative societies other than cooperative banks meaning thereby that the cooperative banks are liable to deduct TDS from the interest other than interest on securities. Therefore it cannot be said that cooperative banks are excluded from the definition of cooperative societies by such an amendment. [Para 29]  Moreover, as reliance

Shree Sarvodaya Sahakari Mandali Ltd., Vadodara vs. NFAC, Delhi Present Jurisdiction the Dy. CIT, Cicle-2(1)(1), Vadodara

In the result, both the appeals of the assessee are allowed

ITA 1348/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad24 Jan 2025AY 2016-17

Bench: Dr.Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Viranch Modi, A.RFor Respondent: Ms. Ketaki Desai, Sr. DR

Section 143(3)Section 147Section 80Section 80PSection 80P(2)(d)

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

In the result, appeal filed by the assessee in ITA

ITA 365/HYD/2018[2014-15]Status: DisposedITAT Hyderabad24 Jan 2025AY 2014-15

Bench: Shri Manjunatha, G. & Shri K. Narasimha Charyआ.अपी.सं /Ita No.350 & 351/Hyd/2018 (निर्धारण वर्ा/Assessment Year: 2013-14 & 2014-15) Dy. C. I. T. Vs. Andhra Bank Circle-1(1) Hyderabad Hyderabad [Pan : Aabca7375C] (Appellant) (Respondent) आ.अपी.सं /Ita No.364 & 365/Hyd/2018 (निर्धारण वर्ा/Assessment Year: 2013-14 & 2014-15) Union Bank Of India Vs. Dy. C. I. T. (Erstwhile Andhra Bank) Circle-1(1) Mumbai Hyderabad [Pan : Aaacu0564G (Aabca7375C)] (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri S.Ananthan & Smt.Lalitha Rameswaran, Ar रधजस् व द्वधरध/Revenue By: Shri K.Meghnath Chowhan, Cit-Dr सुिवधई की तधरीख/Date Of 05/11/2024 Hearing: घोर्णध की तधरीख/Date Of 24/01/2025 Pronouncement: आदेश/Order Per Manjunatha G., A.M

For Appellant: Shri S.Ananthan &For Respondent: Shri K.Meghnath Chowhan

Section 143(3)Section 36(1)Section 36(1)(viii)

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, appeal filed by the assessee in ITA

ITA 364/HYD/2018[2013-14]Status: DisposedITAT Hyderabad24 Jan 2025AY 2013-14

For Appellant: Shri S.Ananthan &For Respondent: Shri K.Meghnath Chowhan

Section 143(3)Section 36(1)Section 36(1)(viii)

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

In the result, appeal filed by the assessee in ITA

ITA 351/HYD/2018[2014-15]Status: DisposedITAT Hyderabad24 Jan 2025AY 2014-15

For Appellant: Shri S.Ananthan &For Respondent: Shri K.Meghnath Chowhan

Section 143(3)Section 36(1)Section 36(1)(viii)

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

In the result, appeal filed by the assessee in ITA

ITA 350/HYD/2018[2013-14]Status: DisposedITAT Hyderabad24 Jan 2025AY 2013-14

For Appellant: Shri S.Ananthan &For Respondent: Shri K.Meghnath Chowhan

Section 143(3)Section 36(1)Section 36(1)(viii)

Income Tax Officer, Gangtok vs. Bhumika Rai, Namchi, Sikkim

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

ITA 1581/KOL/2024[2017-18]Status: DisposedITAT Kolkata23 Jan 2025AY 2017-18

Bench: Sri Sanjay Garg & Sri Rakesh Mishra

Section 10Section 147Section 250Section 69Section 69A

income which accrues or arises to him— (a) from any source in the State of Sikkim; or (b) by way of dividend or interest on securities. Explanation.—For the purposes of this clause "Sikkimese" shall mean— (i) an individual, whose name is recorded in the register maintained under the Sikkim

Income Tax Officer, Ward-1, Shillong vs. Achula Darneichong Sailo, Shillong

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

ITA 120/GTY/2023[2014 ]Status: DisposedITAT Guwahati22 Jan 2025

Bench: Sri Manomohan Das & Sri Rakesh Mishra

Section 10Section 10(26)Section 147Section 148Section 250Section 44A

which accrues or arises to him,— (a) from any source in the areas or States aforesaid, or (b) by way of dividend or interest on securities; In the present instance, the late assessee was a medical doctor running a hospital at Shillong. As seen from the documentary evidence submitted

Income Tax Officer, Ward-1, Shillong vs. Achula Darneichong Sailo, Shillong

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

ITA 119/GTY/2023[2013-14]Status: DisposedITAT Guwahati22 Jan 2025AY 2013-14

Bench: Sri Manomohan Das & Sri Rakesh Mishra

Section 10(26)Section 142(1)Section 147Section 148Section 250Section 44A

which accrues or arises to him — (a) from any source in the areas or States aforesaid, or (b) by way of dividend or interest on securities; In the present instance, the late assessee was a medical doctor running a hospital at Shillong. As seen from the documentary evidence submitted ... therein which accrues or arises to him from any source in the areas or States mentioned therein or by way of dividend or interest on securities, the order of Ld. CIT(A) may be set aside to be done de novo to examine the source of income which

The Vardhman Stampings Pvt. Ltd., Ahmedabad vs. The Asstt. Commissioner of Income Tax, Circle-4(1)(2), Ahmedabad

ITA 363/AHD/2020[2015-16]Status: DisposedITAT Ahmedabad16 Jan 2025AY 2015-16

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumar

Section 263Section 43(5)Section 73

आयकर अपीलीय अधिकरण, अहमदाबाद न्यायपीठ 'A' अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT

The Vardhman Stampings Pvt. Ltd., Ahmedabad vs. The Asstt. Commissioner of Income Tax, Circle-4(1)(2), Ahmedabad

ITA 362/AHD/2020[2014-15]Status: DisposedITAT Ahmedabad16 Jan 2025AY 2014-15

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumar

For Appellant: Shri Manish J. Shah andFor Respondent: Shri H. Phani Raju, CIT-DR

Section 263Section 43(5)Section 73

The Sattavis Patidar Samaj Co.Op. Credit and Vividhlaxi Seva Society Ltd., Mehsana vs. The ITO, Ward-5, Patan

In the result, the appeal of the assessee is allowed

ITA 1477/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad03 Jan 2025AY 2017-18

Bench: Dr.Brr Kumarshri Siddhartha Nautiyal

For Appellant: NoneFor Respondent: Shri VK Mangla, Sr.DR

Section 194ASection 194A(3)(v)Section 263Section 80PSection 80P(2)(d)Section 80P(4)

section 194A (3), it appears that it provides for exemption from deducting Tax Deducted at Source from the income on interest other than interest on securities as the cooperative societies other than cooperative banks meaning thereby that the cooperative banks are liable to deduct TDS from the interest other than ... interest on securities. Therefore it cannot be said that cooperative banks are excluded from the definition of cooperative societies by such an amendment. [Para 29]  Moreover, as reliance placed on the aforesaid decision for applicability of section 80P(4) in the facts of the case is also not possible

DCIT-CC-5(3), Mumbai vs. Kotak Mahindra Life Insurance Co. Ltd., Mumbai

The appeal of the Revenue is dismissed

ITA 3840/MUM/2024[2021-22]Status: DisposedITAT Mumbai01 Jan 2025AY 2021-22

Bench: Ms. Kavitha Rajagopal () & Shri Omkareshwar Chidara () Assessment Year: 2021-22

For Appellant: Shri Madhur Agrawal a/w. ShriFor Respondent: Biswanath Das-CIT DR

Section 115BSection 44

other Schedule will apply for computing incomes and excludes other Schedule will apply for computing incomes and excludes other heads of income like, Interest on Securities, income from house heads of income like, Interest on Securities, income from house heads of income like, Interest on Securities, income from house property