“ interest on securities ”

CIT v. Punjab State Cooperative Agricultural Development Bank Ltd.

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.

389 ITR 68 · 2016 · High Court

192

383 ITR 490 · 2016 · High Court

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.

175

CIT v. Southern Eastern Employees Cooperative Credit Society Ltd.

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.

390 ITR 524 · 2017 · High Court

170

187 ITR 541 · 1991 · Supreme Court

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

116

American Express International Banking Corporation v. CIT

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.

258 ITR 601 · 2002 · High Court

333 ITR 38 · 2011 · High Court

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

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

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.

39 ITR 114 · 1960 · Supreme Court

ITA 249/KOL/2025[2017-18]Status: DisposedITAT Kolkata17 Nov 2025AY 2017-18

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

Kashipur Brihandayatan Credit Cooperative Society Ltd., Purulia vs. ITO, Ward- 3(2), Purulia

In the result, appeal of the Revenue is dismissed

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) I.T.A. No. 249/Kol/2025 Assessment Year: 2017-2018 Kashipur Brihadayatan Credit Cooperative Society Limited,………………………………………Appellant Vill. & P.O. Kalapathar, District-Purulia-723121, West Bengal [Pan:Aaaak9453E] -Vs.- Income Tax Officer,…………………………..…..Respondent Ward-3(2), Purulia, South Lake Road, Purulia-723101, W.B. Appearances By: Shri M. Goenka, C.A. & Shri S. Goenka, C.A., Appeared On Behalf Of The Assessee Shri Susanta Saha, Sr. D.R., Addl. Cit, Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: September 03, 2025 Date Of Pronouncing The Order: November 17, 2025 O R D E R

Section 142(1)Section 143(2)Section 3Section 80PSection 80P(2)(a)

eligible for deduction U/s 80P of the Act. The Ld. Revenue Authorities relied on various case laws to state that income from interest on securities ear marked to reserve fund has been held not eligible for deduction u/s 80P. The Ld. Revenue Authorities have also placed relied on the decision

Neuro Update Chennai, Chennai vs. ITO, Exemption Ward-1, Chennai

In the result, the appeal of the assessee is allowed

ITA 1480/CHNY/2025[2016-17]Status: DisposedITAT Chennai30 Oct 2025AY 2016-17

Bench: Shri Aby T Varkey & Shri S.R.Raghunatha

For Appellant: Shri. G. Sitharaman, CA &For Respondent: Shri. R. Raghupathy, Addl. C.I.T

Section 11Section 12ASection 2(15)Section 250

part of the Circular, for the purpose of the issue-in-hand, is given below: "Where the trust derives income from house property interest on securities, capital gains, or other sources, the word "income" should be understood in its commercial sense. Le, book income, after adding back any appropriations

Celebrity Realcon (P) Ltd, Delhi vs. ITO Ward-49(3), Delhi

In the result, Appeal of the Assessee is allowed

ITA 3706/DEL/2025[2012-13]Status: DisposedITAT Delhi30 Oct 2025AY 2012-13

Bench: Shri Yogesh Kumar U.S. & Shri Naveen Chandracelebrity Realcon (P) Ltd. Vs Ito 10, New Rajdhani Enclave, Ward 49(3), Delhi Vikas Marg, Delhi-110092 Pan: Aadcc8384M Appellant Respondent Assessee By Sh. Amit Goel, Adv, Shri Pranav Yadav, Adv Revenue By Ms.Harpreet Kaur Hansra, Sr. Dr Date Of Hearing 16/10/2025 Date Of Pronouncement 30/10/2025 Order

Section 194Section 194ASection 194ISection 201(1)

Hindu undivided family, who is responsible for paying to a resident any income by way of 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

Bina Kanwar, Jaipur vs. ITO Ward Tonk, Tonk

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

ITA 1243/JPR/2025[2015-16]Status: DisposedITAT Jaipur29 Oct 2025AY 2015-16

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Shrawan Kumar Gupta, AdvocateFor Respondent: Shri Gaurav Awasthi, JCIT-DR

Section 115Section 147Section 234Section 69A

cash deposits of Rs.74,52,000/- in the bank account held with State Bank of Bikaner & Jaipur and the assessee had also earned interest on securities amounting to Rs.17,175/- from Bank of Baroda, Vaishali Nagar, Branch, Jaipur. Thus, in this case information was received by the Department from

Dy. Commissioner of Income Tax, Central Circle-I, Noida vs. Strawberry Farmer Agro Products, Noida

The appeal of the revenue is dismissed

ITA 4091/DEL/2025[2019-20]Status: DisposedITAT Delhi29 Oct 2025AY 2019-20

Bench: Ms. Madhumita Roy & Shri Brajesh Kumar Singhdy. Commissioner Of Vs. Strawberry Farmer Agro Income Tax, Central Products Circle-I, Office Of The C-3, Sector-7, Noida, Deputy Commissioner Of Gautam Budh Nagar, Income Tax, Central Noida, Up 201301 Circle -0I, Noida, Noida, Up 201301 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Acxfs6899J Appellant .. Respondent

For Appellant: Sh. Manish Gupta, Sr. DRFor Respondent: None

Section 142(1)Section 144Section 147Section 148Section 148ASection 251(1)(a)Section 69A

made to the same. Finally, the income to the tune of Rs.2,41,16,506/- received on account of interest other than interest on securities was considered as undisclosed income and added in the hands of the assessee under Section 69A r.w.s 115BBE of the Act and further Rs.35 ... account of interest other than interest on securities added in the hands of the assessee as undisclosed income. The assessee preferred appeal and made a particular statement that the assessee was not aware of the assessment proceedings until it received the letter dated 22.05.2024 for recovery of outstanding demand

Himachal Mitra Mandal Co Operative Credit Society Limited, Mumbai vs. Income Tax Officer TDS, Ward 1(2)(3), Mumbai

ITA 777/MUM/2025[2014-15]Status: DisposedITAT Mumbai06 Oct 2025AY 2014-15

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankarhimachal Mitra Mandal V/S. Income Tax Officer, Tds Cooperative Credit Society बनाम Ward – 1(2)(3), Room No. Limited 419, 4Th Floor, Cumballa Hill C/O Vaish Associates, 106, Mtnl Te Building, Peddar Peninsula Centre, Dr. S.S. Road, Dr. Gopalrao Rao Road, Parel, Mumbai – Deshmukh Marg, Mumbai – 400 012, Maharashtra 400051, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaaah0613D Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Ms. Priyanka Jain, ARFor Respondent: Shri Hemanshu Joshi,(Sr. DR)

Section 194A(3)(v)Section 201Section 201(1)Section 250Section 271CSection 5

deductible at source from any payment of income by way of interest other than income by way of interest on securities. Clause (V) of Sub- Section (3) of Section 194A exempts such income credited or paid by a co-operative society to a member thereof from the requirement

JCIT OSD Circle 2(3)(1), Mumbai vs. Hdfc Bank Limited, Mumbai

In the result, both the above stated appeals of the

ITA 2260/MUM/2025[2021-22]Status: DisposedITAT Mumbai06 Oct 2025AY 2021-22

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Ritesh Misra, (CIT-DR)

ITA 2259/MUM/2025[2019-20]Status: DisposedITAT Mumbai06 Oct 2025AY 2019-20

HDFC Bank Limited, Mumbai 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 of business and profession. The Board, going by the decision of this

JCIT(OSD) Circle 2(3)(1), Mumbai vs. Hdfc Bank Limited, Mumbai

In the result, both the above stated appeals of the

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

ITA 2258/MUM/2025[2020-21]Status: DisposedITAT Mumbai06 Oct 2025AY 2020-21

JCIT(OSD) Circle 2(3)(1), Mumbai vs. Hdfc Bank Limited, Mumbai

In the result, both the above stated appeals of the

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Ritesh Misra, (CIT-DR)

ITA 1573/MUM/2025[2020-21]Status: DisposedITAT Mumbai06 Oct 2025AY 2020-21

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

Hdfc Bank Limited, Mumbai vs. DCIT - 2 (3) (1), Mumbai

In the result, both the above stated appeals of the

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Ritesh Misra, (CIT-DR)

ITA 1555/MUM/2025[2019-20]Status: DisposedITAT Mumbai06 Oct 2025AY 2019-20

Hdfc Bank Limited, Mumbai vs. The Deputy Commissioner of Income Tax - 2 (3) (1), Mumbai

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Ritesh Misra, (CIT-DR)

ITA 1945/CHNY/2025[2018-19]Status: DisposedITAT Chennai26 Sept 2025AY 2018-19

T.C. 30 Thothukudi Port Aluvalar Co-Op Thrift and Credit Society Ltd., Thoothukudi vs. ITO, Ward-1, Tutucorin

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

Bench: Shri S.S. Viswanethra Ravi & Shri Ratnesh Nandan Sahayआयकर अपील सं./I.T.A. No.1945/Chny/2025 िनधा"रण वष"/Assessment Year: 2018-19 T.C. 30, Thoothukudi Port Aluvalar Vs. The Income Tax Officer, Co-Op. Thrift & Credit Society Ltd., Ward 1, Thoothukudi 628 004. Tuticorin. [Pan:Aagat3402L] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri N. Arjun Raj, Advocate ""थ" की ओर से/Respondent By : Ms. Sandhya Rani Kure, Jcit सुनवाई की तारीख/ Date Of Hearing : 18.09.2025 घोषणा की तारीख /Date Of Pronouncement : 26.09.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Assessee Is Directed Against The Order Dated 04.06.2025 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Year 2018-19. 2. In The Grounds Of Appeal, Besides Challenging Assumption Of Jurisdiction Under Section 147 Of The Income Tax Act, 1961 [“Act” In 2

For Appellant: Shri N. Arjun Raj, AdvocateFor Respondent: Ms. Sandhya Rani Kure, JCIT

Section 147Section 148Section 148ASection 80P

disallowance of deduction claimed under section 80P of the Act. 3. The Assessing Officer noted that the assessee has received interest other than interest on securities totalling to ₹.35,64,967/- in the previous relevant to the AY 2018-19, but, however, did not file return of income. Following

DCIT Cen 5 3, Mumbai vs. Icici Lombard General Insurance Co. Limited, Mumbai

In the result, appeals of the Revenue are allowed partly

ITA 1682/MUM/2025[2017-18]Status: DisposedITAT Mumbai26 Sept 2025AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

Section 10(15)Section 10(34)Section 10(38)Section 148Section 148ASection 44

this Act relating to the computation of the provisions of this Act relating to the computation of income chargeable under the head “Interest on securities”, income chargeable under the head “Interest on securities”, income chargeable under the head “Interest on securities”, “Income from house property “Income from house property”, “Capital

DCIT Cen 5 3, Mumbai vs. Icici Lombard General Insurance Co. Limited, Mumbai

In the result, appeals of the Revenue are allowed partly

ITA 1681/MUM/2025[2016-17]Status: DisposedITAT Mumbai26 Sept 2025AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

Section 10(15)Section 10(34)Section 10(38)Section 148Section 148ASection 44

DCIT Cen 5 3, Mumbai vs. Icici Lombard General Insurance Co. Limited, Mumbai

In the result, appeals of the Revenue are allowed partly

ITA 1680/MUM/2025[2015-16]Status: DisposedITAT Mumbai26 Sept 2025AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

Section 10(15)Section 10(34)Section 10(38)Section 148Section 148ASection 44

DCIT Cen 5 3, Mumbai vs. Icici Lombard General Insurance Co. Limited, Mumbai

In the result, appeals of the Revenue are allowed partly

ITA 1679/MUM/2025[2012-13]Status: DisposedITAT Mumbai26 Sept 2025AY 2012-13

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()