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“Section 36(1)(iii)”

Section References (mined)Section 36Section 36(1)(iii)1,547 judgments

The decision most relied on for Section 36(1)(iii) is CIT v. Reliance Utilities & Power Ltd. (313 ITR 340), cited in 2,118 judgments on BharatTax.

Leading authorities on Section 36(1)(iii)

CIT v. Reliance Utilities & Power Ltd.
313 ITR 340 · 2009 · High Court
2,118
citing judgments

Where an assessee claims that investments were made out of own funds, interest disallowance under Section 14A read with Rule 8D may not apply if the assessee demonstrates the availability of sufficient interest-free funds to cover such investments.

S.A. Builders Ltd. v. CIT
288 ITR 1 · 2007 · Supreme Court
1,484
citing judgments

Interest paid on borrowed funds cannot be disallowed merely because the assessee made interest-free advances, provided those advances were made for business purposes and commercial expediency. The Revenue cannot dictate a businessman's commercial decisions, but the assessee bears the onus to prove the business expediency.

CIT v. HDFC Bank Ltd.
366 ITR 505 · 2014 · High Court
1,261
citing judgments

When an assessee possesses interest-free funds sufficient to cover investments yielding tax-free income, it is presumed that such investments were made from these interest-free funds, precluding disallowance of interest expenditure under Section 14A.

Maxopp Investment Ltd. v. CIT
347 ITR 272 · 2012 · High Court
516
citing judgments

Disallowance under Section 14A cannot exceed the exempt income earned. The Assessing Officer must record satisfaction regarding the assessee's accounts before making any disallowance.

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. Reliance Industries Ltd.
410 ITR 466 · 2019 · Supreme Court
501
citing judgments

When mixed funds are available, interest-free advances are presumed to be made from the assessee's own interest-free funds, preventing disallowance of interest expenditure under section 36(1)(iii). This principle also applies to section 14A disallowance, where interest expenditure is not disallowed if surplus funds are available and no direct nexus is established with borrowed funds for investments earning exempt income.

CIT v. Dalmia Cement (Bharat) Ltd.
254 ITR 377 · 2002 · High Court
417
citing judgments

When there is a nexus between an expenditure and the purpose of business, incurred on grounds of commercial expediency, the Revenue cannot question its reasonableness or assume the role of the businessman to compel profit maximization. This principle applies even if the business is not that of the assessee itself.

HDFC Bank Ltd. v. DCIT
383 ITR 529 · 2016 · High Court
408
citing judgments

Where an assessee has sufficient interest-free funds, investments yielding exempt income are presumed to be made out of such funds, precluding disallowance of related interest expenditure under section 14A.

Judgments citing Section 36(1)(iii)

Trig Detectives Pvt Ltd, Mumbai vs. DCIT-Central Circle 1(2), Mumbai

In the result, the appeals filed by the assessee bearing ITA Nos

ITA 1902/MUM/2025[2016-17]Status: DisposedITAT Mumbai02 Dec 2025AY 2016-17

Bench: Shri Anikesh Banerjee & Shri Prabhash Shankar

For Appellant: Shri Rakesh JoshiFor Respondent: Shri Ritesh Misra, CIT DR
Section 139(1)Section 153ASection 250Section 270ASection 271(1)(c)Section 271ASection 274Section 37(1)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR

Trig Detectives Pvt Ltd, Mumbai vs. DCIT Central Circle 1(2), Mumbai

In the result, the appeals filed by the assessee bearing ITA Nos

ITA 1901/MUM/2025[2015-16]Status: DisposedITAT Mumbai02 Dec 2025AY 2015-16

Bench: Shri Anikesh Banerjee & Shri Prabhash Shankar

For Appellant: Shri Rakesh JoshiFor Respondent: Shri Ritesh Misra, CIT DR
Section 139(1)Section 153ASection 250Section 270ASection 271(1)(c)Section 271ASection 274Section 37(1)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR

Trig Detectives Pvt Ltd, Mumbai vs. DCIT Central Circle 1(2), Mumbai

In the result, the appeals filed by the assessee bearing ITA Nos

ITA 1900/MUM/2025[2014-15]Status: DisposedITAT Mumbai02 Dec 2025AY 2014-15

Bench: Shri Anikesh Banerjee & Shri Prabhash Shankar

For Appellant: Shri Rakesh JoshiFor Respondent: Shri Ritesh Misra, CIT DR
Section 139(1)Section 153ASection 250Section 270ASection 271(1)(c)Section 271ASection 274Section 37(1)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR

Deputy Commissioner of Income-Tax, Bengaluru vs. Mathikere Ramaiah Seetharam, Bengaluru

In the result, the appeal of the assessee is allowed

ITA 1297/BANG/2025[2020-21]Status: DisposedITAT Bangalore28 Nov 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Rahul Chaudhary

For Appellant: Shri H.N Khincha, CAFor Respondent: Shri Muthu Shankar, CIT (DR)
Section 143(3)Section 147Section 2(47)(v)

proprietor. He explained that the remaining interest of ₹3,10,10,034 related to inventory and business advances and was allowable under section 36(1)(iii) of the Act. The AR emphasized that the borrowed funds were used for business purposes and that the genuineness of the loans . ITA Nos.1027-1028-1296-1297-1286/Bang/2025

Deputy Commissioner of Income-Tax, Bengaluru vs. Mathikere Ramaiah Seetharam, Bengaluru

In the result, the appeal of the assessee is allowed

ITA 1296/BANG/2025[2021-22]Status: DisposedITAT Bangalore28 Nov 2025AY 2021-22

Bench: Shri Waseem Ahmed & Shri Rahul Chaudhary

For Appellant: Shri H.N Khincha, CAFor Respondent: Shri Muthu Shankar, CIT (DR)
Section 143(3)Section 147Section 2(47)(v)

proprietor. He explained that the remaining interest of ₹3,10,10,034 related to inventory and business advances and was allowable under section 36(1)(iii) of the Act. The AR emphasized that the borrowed funds were used for business purposes and that the genuineness of the loans . ITA Nos.1027-1028-1296-1297-1286/Bang/2025

Mathikere Ramaiah Seetharam, Mathikere vs. ACIT, Circle-1(2), Bangalore

In the result, the appeal of the assessee is allowed

ITA 1286/BANG/2025[2020-21]Status: DisposedITAT Bangalore28 Nov 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Rahul Chaudhary

For Appellant: Shri H.N Khincha, CAFor Respondent: Shri Muthu Shankar, CIT (DR)
Section 143(3)Section 147Section 2(47)(v)

proprietor. He explained that the remaining interest of ₹3,10,10,034 related to inventory and business advances and was allowable under section 36(1)(iii) of the Act. The AR emphasized that the borrowed funds were used for business purposes and that the genuineness of the loans . ITA Nos.1027-1028-1296-1297-1286/Bang/2025

DCIT, CC-2(1), Bengaluru vs. Mathikere Ramaiah Seetharam, Bengaluru

In the result, the appeal of the assessee is allowed

ITA 1028/BANG/2025[2017-18]Status: DisposedITAT Bangalore28 Nov 2025AY 2017-18

Bench: Shri Waseem Ahmed & Shri Rahul Chaudhary

For Appellant: Shri H.N Khincha, CAFor Respondent: Shri Muthu Shankar, CIT (DR)
Section 143(3)Section 147Section 2(47)(v)

proprietor. He explained that the remaining interest of ₹3,10,10,034 related to inventory and business advances and was allowable under section 36(1)(iii) of the Act. The AR emphasized that the borrowed funds were used for business purposes and that the genuineness of the loans . ITA Nos.1027-1028-1296-1297-1286/Bang/2025

DCIT, CC- 2(1), Blr, Bengaluru vs. Mathikere Ramaiah Seetharam, Bengaluru

In the result, the appeal of the assessee is allowed

ITA 1027/BANG/2025[2013-14]Status: DisposedITAT Bangalore28 Nov 2025AY 2013-14

Bench: Shri Waseem Ahmed & Shri Rahul Chaudhary

For Appellant: Shri H.N Khincha, CAFor Respondent: Shri Muthu Shankar, CIT (DR)
Section 143(3)Section 147Section 2(47)(v)

proprietor. He explained that the remaining interest of ₹3,10,10,034 related to inventory and business advances and was allowable under section 36(1)(iii) of the Act. The AR emphasized that the borrowed funds were used for business purposes and that the genuineness of the loans . ITA Nos.1027-1028-1296-1297-1286/Bang/2025

Stella D Souza, Mumbai vs. ITO Ward 31(2)(1), Mumbai

In the result, the Assessee’s appeal is allowed for statistical purposes

ITA 5719/MUM/2025[2013-14]Status: DisposedITAT Mumbai27 Nov 2025AY 2013-14

Bench: Shri Narender Kumar Choudhryassessment Year: 2013-14 Ms. Stella D Souza, Ito 31(2)(1), B/102 Diptigreen, Kautilya Bhavan Opp Bombay Cambridg School Vs. Bandra Kurla Complex, Chakala, Andheri (E), Bandra (E), Mumbai – 400 099 Mumbai - 400099 Pan: Acjpd4624Q (Appellant) (Respondent) Present For: Assessee By : Shri S.C. Agarwal, Ld. A.R. Revenue By : Shri Praveen K. Srivastav, Ld. Sr. D.R. Date Of Hearing : 17.11.2025 Date Of Pronouncement : 27.11.2025 O R D E R Per : Narender Kumar Choudhry: This Appeal Has Been Preferred By The Assessee Against The Order Dated 28.03.2025, Impugned Herein, Passed By The Ld. Commissioner Of Income Tax (Appeals) Addl/Jcit(A) (In Short Ld. Commissioner) U/S 250 Of The Income Tax Act, 1961 (In Short ‘The Act’) For The A.Y. 2013-14. 2. In This Case, The Assessee Being An Individual & Director In M/S. Silver Global Services Pvt. Ltd. Had Earned Interest Income Of Rs.6,48,842/- From Fixed Deposits With Model Co-Operative Bank Ltd. & In Order To Avoid Premature Encashment Of Fd Had Taken Loan Against Such Fd From Model Co-Operative Bank Ltd. & Paid Interest To The Said Bank To The Tune Of Rs.8,39,626/- & Since The Interest Paid Was More Than The Interest Received, Therefore, Has Not Shown Such Interest Earned.

For Appellant: Shri S.C. Agarwal, Ld. A.RFor Respondent: Shri Praveen K. Srivastav, Ld. Sr. D.R
Section 147Section 148Section 250

business, consideration for end use of funds so borrowed would be relevant because the interest deduction is claimed as a business deduction under section 36(1)(iii). That aspect of the matter, however, is academic in the present context as the limited issue for our consideration is whether

Deputy Commissioner of Income Tax, Circle-16(2), Hyderabad vs. Pragati Green Meadows & Resorts Limited, Hyderabad

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

ITA 1795/HYD/2017[2009-10]Status: DisposedITAT Hyderabad26 Nov 2025AY 2009-10

Bench: SHRI G. MANJUNATHA, HONBLE (Accountant Member), SHRI RAVISH SOOD, HONBLE (Judicial Member)

Section 142(1)Section 143(3)Section 147Section 148Section 36(1)(iii)

reasons recorded, as per which the income chargeable to tax has escaped assessment on account of excess allowance of interest under Section 36(1)(iii) of the Income-tax Act, 1961, and accordingly notice under Section 148 of the Act, dated 09.03.2014 was issued and duly served on the assessee ... Finance Pvt. Ltd for purchase of land. The assessee was called upon to explain as to why interest shall not be disallowed under Section 36(1)(iii) of the Income- tax Act, 1961. The assessee failed to explain the reasons. Therefore, the A.O. observed that, the assessee has diverted interest

New Mangalore Port Road Company Limited, New Delhi vs. DCIT, Circle-16(1), Delhi

In the result, the assessee’s appeal is allowed for statistical purposes

ITA 1053/DEL/2025[2015-16]Status: DisposedITAT Delhi17 Nov 2025AY 2015-16

Bench: Shri Yogesh Kumar U.S. & Shri Avdhesh Kumar Mishraita No.1053/Del/2025, A.Y. 2015-16 New Mangalore Port Road Deputy Commissioner Of Company Limited, Income Tax, Circle-16(1), D-21, Corporate Park, Vs. C. R. Building, I P Estate, Sector-21, Dwarka, New Delhi New Delhi Pan: Aabcn9106E (Appellant) (Respondent) Appellant By Ms. Khushboo Singhal, Ca Respondent By Ms. Amisha S. Gupt, Cit(Dr) Date Of Hearing 21/08/2025 Date Of Pronouncement 17/11/2025 Order Per Avdhesh Kumar Mishra, Am This Appeal For Assessment Year (‘Ay’) 2015-16 Filed By The Assessee Is Directed Against The Order Dated 15.09.2022 Of The Commissioner Of Income Tax (Appeals), Nfac, New Delhi [‘Cit(A)’].

Section 271(1)(c)Section 32Section 36(1)(iii)

Disallowance of depreciation of Rs.60,67,90,274/- claimed on Toll Road, (ii) Disallowance of interest of Rs.1,63,94,947/- under section 36(1)(iii) of the Act 4.1 Later, the assessee got the dispute of disallowance of interest of Rs.1,63,94,947/- under section 36(1)(iii ... Thus, on average there is capital work-in progress of Rs.15,86,72,289/-. 7.2.3 As per the provisions of section 36(1)(iii) r.w. Explanation 8 to subsection 1 of section 43 of the Act, interest attributable to capital work-in progress needs to be capitalized with the costs

Mahak Industries Private Limited, Delhi vs. Income Tax Officer, Delhi

In the result, the appeal of assessee stands partly allowed as above

ITA 2530/DEL/2023[2016-17]Status: DisposedITAT Delhi17 Nov 2025AY 2016-17

Bench: Shri Yogesh Kumar U.S. & Shri Avdhesh Kumar Mishra

Section 115JSection 144Section 36(1)Section 36(1)(iii)

Vide 3 grounds of appeal, the assessee has raised following two issues: i. Disallowance of interest of Rs.29,49,583/- under section 36(1)(iii) of the Income Tax Act, 1961 (‘Act’) [Ground No. 1 and 2] ii. Disallowance of expenses of Rs.3,95,318/- [Ground No. 3] Mahak Industries ... appeal before the Ld. CIT(A) and got part relief. The Ld. CIT(A) restricted the disallowance of Rs.73,29,738/- made under section 36(1)(iii) of the Act to Rs.29,49,583/-. The relief allowed by the Ld. CIT(A) out of disallowance of interest has not been

ACIT, Chennai vs. Updater Services Limited, Chennai

In the result, the grounds of appeal raised by both the assessee and the Revenue, as well as the grounds raised in the cross-objections filed by the assessee, are treated as allowed for statistical...

ITA 1616/CHNY/2025[2017]Status: DisposedITAT Chennai14 Nov 2025

Bench: Shri S.S. Viswanethra Ravi & Shri S. R. Raghunathaआयकर अपील सं./Ita No.:1339 /Chny/2025 िनधा#रण वष# / Assessment Year: 2017-18 M/S. Updater Services Limited (Formerly Dcit, Known As Updater Services Private Vs. Central Circle -2(3), Limited), No.2/302-A, Uds Salai, Chennai. Off Old Mahabalipuram Road, Thoraipakkam, Chennai – 600 097. [Pan:Aaacu-6845-J] (अपीलाथ%/Appellant) (&'थ%/Respondent)

For Appellant: Shri. K. Prasanna, C.AFor Respondent: Ms. E. Pavuna Sundari, C.I.T
Section 115QSection 250Section 263Section 391Section 77A

hence, the provisions of Section 56(2)(viia) of the Act would not apply to the instant case. 2. Non-applicability of Section 36(1)(iii) of the Act 2.1 The learned CIT(A) duly examining the facts of the case rightly held that the provisions of Section 36(1 ... creation of any capital asset nor would result in any enduring benefit to the company and accordingly the application of the provisions of Section 36(1)(iii) of the Act to such cases is not warranted. :-5-: ITA Nos.:1339, 1616/Chny/2025 & C.O.No.66/Chny/2025 2.3 The learned CIT(A) after duly

M/S. Updater Services Ltd., Chennai vs. DCIT, Central Circle-2(3), Chennai

In the result, the grounds of appeal raised by both the assessee and the Revenue, as well as the grounds raised in the cross-objections filed by the assessee, are treated as allowed for statistical...

ITA 1339/CHNY/2025[2017-18]Status: DisposedITAT Chennai14 Nov 2025AY 2017-18

Bench: Shri S.S. Viswanethra Ravi & Shri S. R. Raghunathaआयकर अपील सं./Ita No.:1339 /Chny/2025 िनधा#रण वष# / Assessment Year: 2017-18 M/S. Updater Services Limited (Formerly Dcit, Known As Updater Services Private Vs. Central Circle -2(3), Limited), No.2/302-A, Uds Salai, Chennai. Off Old Mahabalipuram Road, Thoraipakkam, Chennai – 600 097. [Pan:Aaacu-6845-J] (अपीलाथ%/Appellant) (&'थ%/Respondent)

For Appellant: Shri. K. Prasanna, C.AFor Respondent: Ms. E. Pavuna Sundari, C.I.T
Section 115QSection 250Section 263Section 391Section 77A

hence, the provisions of Section 56(2)(viia) of the Act would not apply to the instant case. 2. Non-applicability of Section 36(1)(iii) of the Act 2.1 The learned CIT(A) duly examining the facts of the case rightly held that the provisions of Section 36(1 ... creation of any capital asset nor would result in any enduring benefit to the company and accordingly the application of the provisions of Section 36(1)(iii) of the Act to such cases is not warranted. :-5-: ITA Nos.:1339, 1616/Chny/2025 & C.O.No.66/Chny/2025 2.3 The learned CIT(A) after duly

M/S.Ibs Software Services P. Ltd, Trivandrum vs. The DCIT, Trivandrum

ITA 601/COCH/2017[2013-14]Status: DisposedITAT Cochin13 Nov 2025AY 2013-14

Bench: SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Rajakannan, AdvocateFor Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 143(3)Section 144CSection 144C(5)Section 36(1)(iii)Section 36(1)(va)Section 92C

respect of employee’s contribution towards Provident Fund (PF) and Employee State Insurance (ESI), (c) disallowance of interest of INR.12,68,911/- under Section 36(1)(iii) of the Act. The objection raised by the Assessee were disposed off by the DRP vide Order, dated 07/08/2017. DRP rejected the objections ... contracts of INR.5,66,26,572/- (c) Disallowance under Section 36(1)(va) of the Act of INR.77,71,759/- (d) Disallowance under Section 36(1)(iii) of the Act of 2 Assessment Year 2013-2014 INR.12,68,911/- The Assessee has now preferred the present appeal challenging Final Assessment

DCIT, Central Circle-4(3), Kolkata vs. Avima Exports Private Limited, Kolkata

In the result, the appeal of the revenue is dismissed

ITA 1708/KOL/2025[2015-16]Status: DisposedITAT Kolkata11 Nov 2025AY 2015-16

Bench: Shri Rajesh Kumar (Accountant Member), Shri Pradip Kumar Choubey (Judicial Member)

Section 127Section 131Section 133ASection 139Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 151

आयकर अपील"य अ"धकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA Before Shri Rajesh

Kishor Rameshbhai Mehta, Surat vs. ITO, Ward-1(5), Bharuch

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

ITA 60/SRT/2025[2013-14]Status: DisposedITAT Surat10 Nov 2025AY 2013-14

Bench: Shri Sanjay Garg & Shri Bijayananda Prusethआयकर अपील सं./Ita No.60/Srt/2025 Assessment Year: 2013-14 (Hybrid Hearing) Kishor Rameshbhai Mehta Vs. Ito, Prop. Of Aditya Infrastructure, Ward - 1(5), 139, Maher Nagar, Opp. Baps Bharuch Hospital, Adajan Gam Circle, Surat - 395 009 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Adepm 4458 R (Appellant) (Respondent) Appellant By Shri P. M. Jagasheth, Ca Respondent By Shri Ajay Uke, Sr. Dr Date Of Hearing 12/08/2025 Date Of Pronouncement 10/11/2025

Section 194ASection 194CSection 2(24)Section 250Section 253(3)Section 36(1)(iii)Section 40Section 68Section 69A

IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER

Bansal Pathways Damoh Katni P Ltd, Bhopal vs. DCIT 1(1), Bhoopal

The appeal of the assesse is allowed for statistical purpose

ITA 851/IND/2024[2018-19]Status: DisposedITAT Indore10 Nov 2025AY 2018-19

Bench: Shri B.M. Biyani & Shri Paresh M Joshibansal Pathways Damoh Dcit-1(1), बनाम Katni Private Limited, Bhopal / 15Th Floor Bansal One, Vs. Rani Kamlapati Railway Station, Bhopal

Section 143(3)Section 250Section 253

Since, the assessee had diverted its borrowed fund to its prompter company without charging any interest & Section 36(1)(iii) allows the deduction of the amount of interest paid in respect of capital borrowed for the purpose of business but herein this case, the money given to promoter company ... business purposes. Therefore, proportionate interest relating to the said amount out of the total interest paid to the bank is being disallowed under section 36(1)(iii) of the IT Act. 10. The amount being disallowed is 12.20% of Rs.13,63,07,111/- = Rs.1,66,29,946/-”. 2.2 That

Deputy Commissioner of Income Tax, Visakhapatnam vs. Venkata Sita Ramachandra Rao Kanchumarthy, Rajahmundry

In the result, appeal of the revenue is dismissed

ITA 352/VIZ/2025[2016-17]Status: DisposedITAT Visakhapatnam07 Nov 2025AY 2016-17

Bench: Shri Ravish Sood, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपीलसं./I.T.A.No.352/Viz/2025 (निर्धारण वर्ा/ Assessment Year:2016-17) Vs. Dy. Commissioner Of Income Tax Venkata Sita Ramachandra Rao Kanchumarty International Taxation, Circle H.No. 26-22-16 Ground Floor, Infinity Tower Near Chinna Anjaneya Swamy Temple Sankarmattam Road Danavaipeta, Rajahmundry Visakhapatnam – 530016 East Godavari District – 533103 Andhra Pradesh Andhra Pradesh [Pan:Edzpk3519Q]

Section 143(2)Section 148Section 271(1)(c)Section 292B

claimed by assessee for availing professional services and further disallowed a sum of certain amount on account of interest claimed by assessee under section 36(1)(iii) and made additions to income of assessee- He also directed for issuance of notice under section 271(1)(c) - He further levied penalty

Shri Natarajan Somasundaram, Chennai vs. ITO, Ncw-8(2), Chennai

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

ITA 788/CHNY/2025[2018-19]Status: DisposedITAT Chennai07 Nov 2025AY 2018-19

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.788/Chny/2025 िनधा"रण वष"/Assessment Year: 2018-19 Shri Natarajan Somasundaram, Vs. The Income Tax Officer, E-105, Periyar Vegetable Market, Non-Corporate Ward 8(2), Koyambedu, Chennai 600 092. Chennai. [Pan:Aajps6303B] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri D. Anand, Advocate ""थ" की ओर से/Respondent By : Ms. Gouthami Manivasagam, Jcit सुनवाई की तारीख/ Date Of Hearing : 24.09.2025 घोषणा की तारीख /Date Of Pronouncement : 07.11.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Assessee Is Directed Against The Order Dated 04.10.2023 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Year 2018-19. 2. We Find That This Appeal Is Filed With A Delay Of 443 Days. The Assessee Filed An Affidavit For Condonation Of Delay Stating The Reasons. Upon Hearing Both The Parties & On Examination Of The Said Affidavit, In The Interest Of Justice, We Condone The Delay Of 450 Days By Imposing Cost

For Appellant: Shri D. Anand, AdvocateFor Respondent: Ms. Gouthami Manivasagam, JCIT
Section 24Section 32

submits that the ld. CIT(A)/NFAC erred in holding the disallowance of interest on borrowed capital claimed under section 36(1)(iii) of the Act only on the assumption of business of trading in onions does not require capital expenditure or term loans. He vehemently argued that the said