“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

Chhattisgarh Housing Board, Raipur vs. Assistant Commissioner, Exemption Circle, Raipur

In the result, this appeal of the assessee is allowed as above for statistical purposes

ITA 651/RPR/2025[2013-14]Status: DisposedITAT Raipur17 Feb 2026AY 2013-14

Bench: Shri Partha Sarathi Chaudhury, Jm & Shri Avdhesh Kumar Mishra, Am आयकर अपील सं. / Ita Nos: 649, 650, 651, 652 & 653/Rpr/2025 (िनधा"रण वष" Assessment Years: 2011-12, 2012-13, 2013-14, 2016-17 & 2017-18) Chhattisgarh Housing Board, Vs Assistant Commissioner Of Income Sector-19, Paryavaas Bhawan, Tax (Exemption) Circle, Income Tax Naya Raipur, Chhattisgarh, 492002 Office, Quarter No.1, Type-V, Income Tax Residential Colony, Civil Lines, Raipur, Chhattisgarh, 492001 Pan: Aaeca9783D (अपीलाथ"/Appellant) : (""थ" / Respondent) िनधा"रती की ओर से / Assessee By : Shri Shubham Mehta, Ca राज" की ओर से / Revenue By : Shri Raj Kumar Ghosh, Cit-Dr Dr. Priyanka Patel, Sr. Dr सुनवाई की तारीख / Date Of Hearing : 11/02/2026 घोषणा की तारीख / Date Of : 17/02/2026 Pronouncement आदेश / O R D E R Per Avdhesh Kumar Mishra, Am: Common Facts & Similar Grounds Arise In The Above Captioned Appeals Of The Assessee; Therefore, These Appeals Were Heard Together & Are Being Disposed Off By This Common Order.

For Appellant: Shri Shubham Mehta, CAFor Respondent: Shri Raj Kumar Ghosh, CIT-DR

Section 11Section 12ASection 250

banking company during one day amounting to Rs. 2,94,49,120/- and received contract receipts of Rs. 39,24,946/- and received interest on securities of Rs. 21,551/-. Since no return of income was filed by the appellant, the receipts of F.Y. 2010-11 remained unoffered ... received Chhattisgarh Housing Board vs. ACIT (E), Raipur contract receipts of Rs. 39,24,946/- and was in receipt of interest on securities of Rs. 21,551/- however did not file the return of income. Therefore, receipts of Rs. 3,33,95,617/- remained unoffered for the purpose of taxation

Chhattisgarh Housing Board, Raipur vs. Assistant Commissioner, Exemption Circle, Raipur

In the result, this appeal of the assessee is allowed as above for statistical purposes

ITA 650/RPR/2025[2012-13]Status: DisposedITAT Raipur17 Feb 2026AY 2012-13

For Appellant: Shri Shubham Mehta, CAFor Respondent: Shri Raj Kumar Ghosh, CIT-DR

Section 11Section 12ASection 250

Chhattisgarh Housing Board, Raipur vs. Assistant Commissioner, Exemption Circle, Raipur

In the result, this appeal of the assessee is allowed as above for statistical purposes

ITA 649/RPR/2025[2011-12]Status: DisposedITAT Raipur17 Feb 2026AY 2011-12

For Appellant: Shri Shubham Mehta, CAFor Respondent: Shri Raj Kumar Ghosh, CIT-DR

Section 11Section 12ASection 250

Shri Hanuman Credit Souharda Sahakari Sangh Ltd, Belagavi vs. Income Tax Officer, Ward - 1, Nippani

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

ITA 235/PAN/2025[2017-18]Status: DisposedITAT Panaji16 Feb 2026AY 2017-18

Bench: SHRI PAVAN KUMAR GADALE (Judicial Member)

Section 80P(2)(a)

deduction under section 80P(2)(a)(i) of the Act. The CBDT CIRCULAR No.18/2015 F.No.279/Misc./140/2015/ITJ dated 02.11.2015 on the issue of interest SLR securities of banks states that – 1.“It has been brought to the notice of the Board that in the case of Banks, field officers ... income from other sources." 2. Clause (id) of sub-section (1) of Section 56 of the Act provides that income by way of interest on securities shall be chargeable to income tax under the head "Income from Other Sources", if, the income is not chargeable to income-tax under

Shiv Prasad Ram, Bokaro vs. Assessing Officer, Bokaro

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

ITA 393/RAN/2024[2015-2016]Status: DisposedITAT Ranchi16 Feb 2026AY 2015-2016

Bench: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahay(Virtual Hearing) Shiv Prasad Ram, I.T.O., Near Petrol Pump, Sector-9/A, Basanti Ward 3(1), Vs. More, Sector-Ix, S.O. Alkusa, Bokaro. Bokaro-827009 (Jharkhand) Pan No. Aqepr 2909 K Appellant/ Assessee Respondent/ Revenue

Section 10(12)Section 142(1)Section 148Section 192Section 194ASection 69Section 80C

Bank of Baroda, Ranchi and further deposited ₹ 16,00,000/- in Bank of Baroda, Dhanbad. Further the assessee has also received interest on securities under Section 194A amounting to ₹ 95,271/- from Bank of Baroda and also received salary under Section 192 of the Income Tax Act, 1961 (in short

Shree Mahila Credit Souhard Sahakari Sangh Niyamit, Belagavi vs. ITO Ward 1 Belagavi, Belagavi

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

ITA 116/PAN/2024[2017-18]Status: DisposedITAT Panaji13 Feb 2026AY 2017-18

Bench: Shri Pavan Kumar Gadale & Shri G D Padmahshalii T A. No.116/Pan/2024 (A.Y. 2017-18) Shree Mahila Credit Souhard Vs Ito-Ward-2, Sahakari Sangh Niyamit, Feroj Khimjibhai Cpx, . Shop.No.3, Maruti Complex, Civil Hospital Road 2 Nd Railway Gate, Tilakwadi, Belagavi-590001. Belgaum-500006, Karnataka. Karnataka. . Pan .No. Aabas9244A (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) Assessee By Shri.Pramod Y Vaidya.Ar Revenue By Smt.Rijula Uniyal.Sr.Dr सुनवाई की तारीख/Date Of Hearing 09.02.2026 घोषणा की तारीख/Date Of Pronouncement 13.02.2026 Order Per Pavan Kumar Gadale, Jm: The Appeal Is Filed By The Assesse Against The Order Of The Nfac/Cit(A) Passed U/Sec 143(3) & U/Sec 250 Of The Act. The Assessee Has Raised The Grounds Of Appeal Challenging The Order Of The Cit(A) Partially Sustaining The Denial Of Claim Of Deduction U/Sec80P(2)(A)(I) Of The Act Made By The Assessing Officer & Without Prejudice Alternate Relief U/Sec80P(2)(D) Of The Act & Sustaining Denial Of Deduction Of Interest On Income Tax Refund Under Section 80P(2)(A)(I) Of The Act.

Section 80P(2)(a)Section 80P(2)(d)

National Insurance Company Limited, New Town vs. DCIT, Circle 5(1), Kolkata

In the result, the appeal filed by the assessee in ITA No

ITA 2806/KOL/2025[2023-2024]Status: DisposedITAT Kolkata12 Feb 2026AY 2023-2024

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 250Section 270ASection 37(1)Section 40C

under: “Notwithstanding anything to the contrary contained in the provisions of this Act 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, the profits

National Insurance Company Limited, New Town vs. DCIT, Circle 5(1), Kolkata

In the result, the appeal filed by the assessee in ITA No

ITA 2804/KOL/2025[2018-2019]Status: DisposedITAT Kolkata12 Feb 2026AY 2018-2019

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 250Section 270ASection 37(1)Section 40C

National Insurance Company Limited, New Town vs. DCIT, Circle 5(1), Kolkata

In the result, the appeal filed by the assessee in ITA No

ITA 2803/KOL/2025[2018-2019]Status: DisposedITAT Kolkata12 Feb 2026AY 2018-2019

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 250Section 270ASection 37(1)Section 40C

Unmesh Ravindranath Fadnis, Thane vs. ITO Ward 3(4), Thane

In the result, grounds raised by the assessee are allowed for statistical purpose

ITA 6589/MUM/2025[2017-18]Status: DisposedITAT Mumbai11 Feb 2026AY 2017-18

Bench: SHRI ANIKESH BANERJEE (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

For Appellant: Shri Sanjeev Bhramhe, CAFor Respondent: Shri Sushil Bhagat, Sr. DR

Section 142(1)Section 144Section 147Section 148Section 148ASection 194ASection 69

amounting to Rs.28,73,541/-. This information also contained that a TDS of Rs.19,411/- was done u/s. 194A on interest other than interest on securities. Assessee was given opportunity by initiating proceedings u/s. 148A(b) where after, order u/s. 148A(d) was passed on 30.01.2024, treating

ACIT., Circle-6(1), Hyderabad vs. New Club, Hyderabad

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

ITA 958/HYD/2025[2018-19]Status: DisposedITAT Hyderabad04 Feb 2026AY 2018-19

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri V. Srinivas, CAFor Respondent: : Dr. Sachin Kumar, SR-DR

Section 139Section 139(1)Section 147Section 148Section 148ASection 194ASection 69A

Cash Deposits: - Generates cash from Sale of different Services provided. 2) Cash Withdrawals: - To meet day-to day expenditure. 3) Interest other than interest on securities (Sec 194A):- Generates Interest income out of FDs with Banks. 4) Payment to other contractors (Sec 194C):- Transactions were entered into for carried

Global Developers, Nellore vs. DCIT, Circle-1, Nellore

ITA 1683/HYD/2025[2018-2019]Status: DisposedITAT Hyderabad04 Feb 2026AY 2018-2019

Bench: Shri Manjunatha G. & Shri Ravish Soodआ.अपी.सं /Ita No.1683/Hyd/2025 (िनधा"रण वष"/Assessment Year: 2018-19) Global Developers, Vs. Dcit, Nellore. Circle-1, Pan: Aagfg8471R Nellore. (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: None राज" व "ारा/Revenue By: Shri Sankar Pandi. P, Sr. Ar सुनवाई की तारीख/Date Of Hearing: 28/01/2026 घोषणा की तारीख/Date Of 04/02/2026 Pronouncement: आदेश / Order Per. Ravish Sood, J.M:

For Appellant: NoneFor Respondent: Shri Sankar Pandi. P, Sr. AR

Section 143(2)Section 143(3)Section 40

made during the subject year, viz., (i) payment to contractors (under section 194C): Rs.1,09,885/-; (ii) interest other than the interest on securities (under section 194A): Rs.35,85,844/-; (iii) fees for professional or technical services (under section 194J): Rs.6,000/-; and (iv) rent (under section 194I): Rs.1

Osg (India) Private Limited, Gurgaon vs. DCIT, Circle-3(1), Gurgaon

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

ITA 4925/DEL/2024[2021-22]Status: DisposedITAT Delhi04 Feb 2026AY 2021-22

Bench: Shri Yogesh Kumar Us & Shri Brajesh Kumar Singh

Section 143(3)Section 144B

also added a sum of Rs. 55,450/- on account of ‘addition on account of receipt other than interest on securities’. The relevant extract of the order of the final assessment order in para no. 4.6 to 4.7 are reproduced as under: “ 4.6 On verification of reply of the assessee

Sapana Dharmendra Shah, Malegaon vs. The Income Tax Officer, Ward -1, Malegaon

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

ITA 2217/PUN/2025[2018-19]Status: DisposedITAT Pune27 Jan 2026AY 2018-19

Bench: Shri R.K. Panda & Ms. Astha Chandraआयकर अपील सं. / Ita No.2217/Pun/2025 धििाारण वर्ा / Assessment Year : 2018-19 Sapana Dharmendra Shah, The Income Tax Officer, Khodiyar Bhavan, Ramsetu, Ward – 1, Malegaon Opp. Gayatri Mangal Karyala, Vs. Malegaon, Nashik-423203 Pan : Belps3009B अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee By : Shri Sanjeev Mutha (Virtual) Department By : Shri Manish Mehta Date Of Hearing : 20-01-2026 Date Of 27-01-2026 Pronouncement : आदेश / Order Per Astha Chandra, Jm : The Appeal Filed By The Assessee Is Directed Against The Order Dated 22.08.2024 Of The Ld. Commissioner Of Income Tax (Appeals)/Nfac, Delhi [“Cit(A)/Nfac”] Pertaining To Assessment Year (“Ay”) 2018-19. 2. Briefly Stated The Facts Are That The Assessee Is An Individual & Did Not File His Return Of Income For Ay 2018-19. Based On The Information Flagged By The Cbdt Through Insight Portal Under The Head “Nms Category”, It Was Found That During The Relevant Ay 2018-19, The Assessee Had Deposited Cash Of Rs.2,91,03,000/- In Her Bank Account Maintained With The Malegaon Merchant‟S Co-Op Bank Ltd. In The Name Of M/S Shree Kakaji Masale & Foods. Further, There Is Also Tds Made To The Tune Of Rs.1,524/- U/S 194A Of The Income Tax Act, 1961 (The “Act”) On „Interest Other Than „Interest On Securities‟ Against A Total Credit Of Rs.15,240/- By The Malegaon Merchant‟S Co-Op Bank Ltd., Which Has Not Been Disclosed To The Department. Since, The Assessee Had Not Filed Her Return Of Income, Notice U/S 148 Of The Act Was Issued On 05.04.2022 Which Was Duly Served Upon The Assessee. In Response Thereto, The Assessee Did Not File Her Return Of Income. Thereafter, Notice U/S 142(1) Of The Act As Well As Show Cause Notice Were Issued, In Response To Which The Assessee Filed Certain

For Appellant: Shri Sanjeev Mutha (Virtual)For Respondent: Shri Manish Mehta

Section 142(1)Section 147Section 148Section 148ASection 194ASection 69A

also TDS made to the tune of Rs.1,524/- u/s 194A of the Income Tax Act, 1961 (the “Act”) on „interest other than „Interest on securities‟ against a total credit of Rs.15,240/- by The Malegaon Merchant‟s Co-op Bank Ltd., which has not been disclosed to the Department

Shree Vegam Urban Co Op Credit Society Limited, Surat vs. ACIT, Circle-1(2), Surat

In the result, the appeal of the assessee is allowed

ITA 252/SRT/2025[2017-18]Status: HeardITAT Surat22 Jan 2026AY 2017-18

Bench: Dr. B.R.R. Kumar, Vice-Ms Suchitra Raghunath Kamble

For Appellant: Shri Shaunak K. Zaveri, CAFor Respondent: Ms Namita Patel, Sr. DR

Section 194ASection 194A(3)(v)Section 250Section 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, Cir-5(1), Kolkata vs. M/S Coal India Ltd., Kolkata

ITA 1697/KOL/2019[2014-15]Status: DisposedITAT Kolkata20 Jan 2026AY 2014-15

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 250

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

DCIT, Cir-5(1), Kolkata vs. M/S Coal India Ltd., Kolkata

In the result, the Revenue’s appeal in ITA No

ITA 1696/KOL/2019[2013-14]Status: DisposedITAT Kolkata20 Jan 2026AY 2013-14

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 250

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

M/S Coal India Ltd., Kolkata vs. DCIT, Cir-5(1), Kolkata

ITA 1407/KOL/2019[2014-15]Status: DisposedITAT Kolkata20 Jan 2026AY 2014-15

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 1Section 115JSection 250

M/S. Coal India Limited, Kolkata vs. DCIT, Circle - 5(1), Kolkata

In the result, the Revenue’s appeal in ITA No

ITA 1406/KOL/2019[2013-14]Status: DisposedITAT Kolkata20 Jan 2026AY 2013-14

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 250

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

DCIT, Circle - 5(1), Kolkata vs. M/S. Coal India Limited, Kolkata

ITA 623/KOL/2018[2012-13]Status: DisposedITAT Kolkata20 Jan 2026AY 2012-13

Section 115JSection 250

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA