“Section 37(7)”
The decision most relied on for Section 37(7) is State Bank of Mysore v. DCIT (33 SOT 7), cited in 39 judgments on BharatTax.
Leading authorities on Section 37(7)
When bad debts written off were not allowed as a deduction, any subsequent recovery from such bad debts cannot be brought to tax. This principle is upheld even if a deduction for provisions for bad and doubtful debts was allowed under section 36(1)(viia).
An Assessing Officer cannot allow a claim for deduction that is raised afresh unless a revised return is filed. However, an assessee is not disabled from raising such a claim before appellate authorities if it was disallowed by the Assessing Officer for the technical reason of not filing a revised return.
Payments made by an employer directly to the LIC towards an employees' group gratuity fund are allowable as a deduction under Section 36(1)(v) of the Income Tax Act, 1961, provided the employer has no control over these funds.
The decision in Godrej & Boyce Manufacturing Company Ltd. [2017] 7 SCC 421 is referred to in the context of the rule of consistency, particularly concerning the application of provisions related to income calculation and disallowances.
For income to be considered as having ceased to be payable and brought to tax under Section 41(1), it is not sufficient that the claim for repayment has become barred by limitation; there must be a release or write-off of the debt by the creditor in favour of the assessee.
Interest paid by an Indian branch of a bank to its overseas head office is not allowable as a deduction. This is because the payment is not considered chargeable to tax in India, and therefore, Section 195 TDS provisions are not attracted.
Interest paid by an Indian branch to its Head Office is taxable in India as income accruing or arising in India, even if the branch is a Permanent Establishment (PE), especially after the insertion of an explanation to Section 9(1)(v) of the Income Tax Act.
Foreseeable losses, when determined on an estimated basis as per Accounting Standard 7 (AS-7) and duly debited in audited accounts, are allowable as expenditure under section 37(1) of the Income Tax Act, irrespective of the accounting method used.
