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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)

M/S Meera Metal Industries, Mumbai vs. The ITO - 27(2)(3), Mumbai

In the result, appeal of the assessee is allowed

ITA 133/MUM/2021[2012-13]Status: DisposedITAT Mumbai26 Jul 2022AY 2012-13
Section 143(3)Section 36(1)(iii)

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER M/s

Mafatlal Industries Limited, Mumbai vs. ACIT-6(3), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 4369/MUM/2013[2008-09]Status: DisposedITAT Mumbai25 Jul 2022AY 2008-09

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Arati Vissanji &For Respondent: Nimesh Yadav
Section 143(3)Section 14ASection 36(1)(iii)

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S

Mafatlal Industries Ltd, Mumbai vs. Asst CIT 6(3), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 6963/MUM/2012[2007-08]Status: DisposedITAT Mumbai25 Jul 2022AY 2007-08

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Arati Vissanji &For Respondent: Nimesh Yadav
Section 143(3)Section 14ASection 36(1)(iii)

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S

Mafatlal Industries Ltd, Mumbai vs. Addl CIT 6(3), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 6085/MUM/2011[2006-07]Status: DisposedITAT Mumbai25 Jul 2022AY 2006-07

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Arati Vissanji &For Respondent: Nimesh Yadav
Section 143(3)Section 14ASection 36(1)(iii)

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S

DCIT - 3(3)(2), Mumbai vs. V. Hotels Ltd.(Formerly Known As Tulip Hospitality Services Ltd), Mumbai

In the result, all the appeals filed by the revenue are dismissed

ITA 5664/MUM/2018[2013-14]Status: DisposedITAT Mumbai20 Jul 2022AY 2013-14
Section 32(1)(ii)

THE INCOME TAX APPELLATE TRIBUNAL “F” Bench, Mumbai Shri B.R. Baskaran (AM) & Shri Rahul Chaudhary (JM) I.T.A. No. 5662/Mum/2018 (A.Y

DCIT - 3(3)(2), Mumbai vs. V. Hotels Ltd.(Formerly Known As Tulip Hospitality Services Ltd), Mumbai

In the result, all the appeals filed by the revenue are dismissed

ITA 5663/MUM/2018[2013-14]Status: DisposedITAT Mumbai20 Jul 2022AY 2013-14
Section 32(1)(ii)

THE INCOME TAX APPELLATE TRIBUNAL “F” Bench, Mumbai Shri B.R. Baskaran (AM) & Shri Rahul Chaudhary (JM) I.T.A. No. 5662/Mum/2018 (A.Y

DCIT - 3(3)(2), Mumbai vs. V. Hotels Ltd.(Formerly Known As Tulip Hospitality Services Ltd), Mumbai

In the result, all the appeals filed by the revenue are dismissed

ITA 5662/MUM/2018[2012-13]Status: DisposedITAT Mumbai20 Jul 2022AY 2012-13
Section 32(1)(ii)

THE INCOME TAX APPELLATE TRIBUNAL “F” Bench, Mumbai Shri B.R. Baskaran (AM) & Shri Rahul Chaudhary (JM) I.T.A. No. 5662/Mum/2018 (A.Y

DCIT- CC- 2(4), Mumbai vs. Shruti Art Pvt. Ltd., Mumbai

ITA No.2647/Mum/2016 2007-08

ITA 2649/MUM/2016[2009-10]Status: DisposedITAT Mumbai15 Jul 2022AY 2009-10
Section 132(1)Section 143(3)

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E‘ BENCH MUMBAI BEFORE: SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI M.BALAGANESH, ACCOUNTANT MEMBER & Dy

DCIT -Central Circle-2(4), Mumbai vs. Shruti Art Pvt. Ltd., Mumbai

ITA No.2647/Mum/2016 2007-08

ITA 2647/MUM/2016[2007-08]Status: HeardITAT Mumbai15 Jul 2022AY 2007-08
Section 132(1)Section 143(3)

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E‘ BENCH MUMBAI BEFORE: SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI M.BALAGANESH, ACCOUNTANT MEMBER & Dy

Silverdale Fashions, Mumbai vs. Asst CIT Circle- 25 (1), Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 7867/MUM/2019[2013-14]Status: DisposedITAT Mumbai14 Jul 2022AY 2013-14
Section 143(3)Section 36(1)(iii)

usage for the purpose of business. The ld AR submitted that the assessee , on a conservative note, had erroneously understood the provisions of section 36(1)(iii) of the Act together with its proviso thereon and resorted to treat the major part of the interest paid on borrowings that were

ACIT 28 (2), Mumbai vs. Real Trade Technologies, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 6939/MUM/2019[2013-14]Status: DisposedITAT Mumbai07 Jul 2022AY 2013-14

Bench: Shri Pavan Kumar Gadale & Shri Gagan Goyalacit-28(2), Room No. 307, 3Rd Floor,Tower No.6, Vashi Railway Station Complex, Vashi, Navi Mumbai-400703 ...... Appellant Vs. M/S Real Trade Technologies, F-07, D-02, Real Tech Park, Plot No.-39/02, Sector-10, Vashi, Navi Mumbai-400705. Pan: Aaifr4687C ..... Respondent Appellant By : Sh. T. Shankar (Sr. Ar.Cit) Respondent By : Sh. M. Subramanian (Ar) Date Of Hearing : 12/04/2022 Date Of Pronouncement : 07/07/2022 Order Per Gagan Goyal, A.M: This Appeal By The Revenue Is Directed Against The Order Of Ld. Commissioner Of Income Tax (Appeals)-26, Mumbai [Hereinafter Referred To As ‘The Cit (A)’] Dated 26.08.2019 For The Assessment Year (Ay) 2013-14. The Revenue Has Raised The Following Grounds Of Appeal: "1. Whether On The Facts & In The Circumstances Of The Case & In Law, The Ld. Citia) Was Correct In Deleting The Disallowance Of Proportionate Interest Paid On Borrowed Capital Amounting To Rs. 2, 12 40,434/- U/S 36(1) (Iii) Of The Act Without Appreciating That The Assessee Has Not Been Able To Establish The Commercial

For Appellant: Sh. T. Shankar (Sr. Ar.CIT)For Respondent: Sh. M. Subramanian (AR)
Section 143(2)Section 36(1)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D”, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI GAGAN

Telstar Travels Private Limited, Mumbai vs. ACIT Cir-1 (3) (2), Mumbai

In the result, the assessee succeeds on ground No

ITA 5795/MUM/2019[2010-11]Status: DisposedITAT Mumbai07 Jul 2022AY 2010-11

Bench: Shri Vikas Awasthy & Shri M. Balaganeshआअसं. 5795/मुं/2019 ("न.व. 2010-11) M/S. Telestar Travels Pvt. Ltd., 208, Mistry Court, Dinshaw Wacha Road, Mumbai 400 020. Pan: Aabct-3101-D ...... अपीलाथ" /Appellant बनाम Vs. Asstt. Commissioner Of Income Tax, Circle-1(3)(2), Room No.540, 5Th Floor, Aaykar Bhavan, M.K.Road, Mumbai 400 020. ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : Shri P.P.Bhandari ""तवाद" "वारा/Respondent By : Shri Pitta Samuel सुनवाई क" "त"थ/ Date Of Hearing : 07/07/2022 घोषणा क" "त"थ/ Date Of Pronouncement : 07/07/2022 आदेश/ Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax (Appeals)-3, Mumbai ( In Short ‘The Cit(A) ’) Dated 02/08/2019 For The Assessment Year 2010-11. 2. The Assessee In Appeal Has Raised Two Grounds. In Ground No.1 Of Appeal, The Assessee Has Challenged Reopening Of Assessment. The Ld.

For Appellant: Shri P.P.BhandariFor Respondent: Shri Pitta Samuel
Section 36(1)(iii)

आयकर अपील"य अ"धकरण मुंबई पीठ “ ई ” "ी "वकास अव"थी, "या"यक सद"य एवं "ी एम बालगणेश, लेखाकार सद

M/S. Mobily Infotech India Private Limited, Bangalore vs. Income Tax Officer, Ward-4(1)(3), Bangalore

In the result, the appeal by the assessee is allowed

ITA 313/BANG/2022[2017-18]Status: FixedITAT Bangalore07 Jul 2022AY 2017-18

Bench: Shri George George K. & Ms. Padmavathy Sassessment Year : 2016-17

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sankarganesh K. Jt.CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)Section 36(1)(iii)Section 40

notice u/s.143(2) was issued and served. 4. The AO passed the assessment order u/s 143(3) dated 28/12/2018 by making disallowance under section 36(1)(iii) of the Income-tax Act, 1961 [the Act] in respect of interest paid amounting to Rs. 78,11,581. The AO also held ... disallowed under section 40(a)(ia). As the entire interest expenditure of Rs. 78,11,581 was disallowed under section 36(1)(iii), it was stated that the disallowance of Rs. 20,11,358 will be enforced based on the findings in favour of the Assessee

M/S. Hical Infra Private Limited, Bangalore vs. Deputy Commissioner of Income Tax (OSD), Range- 1, Bangalore

In the result, the appeal by the assessee is allowed

ITA 313/BANG/2020[2016-17]Status: DisposedITAT Bangalore07 Jul 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy Sassessment Year : 2016-17

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sankarganesh K. Jt.CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)Section 36(1)(iii)Section 40

notice u/s.143(2) was issued and served. 4. The AO passed the assessment order u/s 143(3) dated 28/12/2018 by making disallowance under section 36(1)(iii) of the Income-tax Act, 1961 [the Act] in respect of interest paid amounting to Rs. 78,11,581. The AO also held ... disallowed under section 40(a)(ia). As the entire interest expenditure of Rs. 78,11,581 was disallowed under section 36(1)(iii), it was stated that the disallowance of Rs. 20,11,358 will be enforced based on the findings in favour of the Assessee

Dy CIT 15(1)(2), Mumbai vs. M/S India Tube Mills & Metals Pvt Ltd., Mumbai

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

ITA 579/MUM/2020[2014-15]Status: DisposedITAT Mumbai06 Jul 2022AY 2014-15

Bench: Shri Amarjit Singh & Ms. Kavitha Rajagopaldy. Commissioner Of Income M/S. India Tube Mills & Tax-15(1)(2), Vs. Metals Pvt. Ltd., Mumbai. Mumbai. Pan No.Aaac13048R Appellant Respondent Revenue By : Shri Surinder Mehra, Ca Assessee By : Shri R A Dhyani, (D.R.) Date Of Hearing : 16.06.2022. Date Of Pronouncement : 06.07.2022. O R D E R Per Amarjit Singh, A.M. : This Appeal Filed By The Revenue Against The Order Of Commissioner Of Income Tax (Appeals)-24, Mumbai Dt.25.10.2019 For The Assessment Year 2014-15. 2. The Revenue Has Raised The Following Grounds Of Appeal :

For Appellant: Shri R A Dhyani, (D.R.)For Respondent: Shri Surinder Mehra, CA
Section 143(2)Section 14A

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H” MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS. KAVITHA RAJAGOPAL

M/S General Aerodynamics P. Ltd., Mumbai vs. ITO - 2(1)(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 252/MUM/2021[2016-17]Status: DisposedITAT Mumbai05 Jul 2022AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2016-17 M/S General Aerodynamics Pvt. Ltd., Income Tax Officer-2(1)(2), Ali Chambers, Tamarind Lane, Fort, Room No. 543, Aayakar Mumbai-400023. Vs. Bhavan, M.K. Road, Churchgate-400021. Pan No. Aabcg 4629 H Appellant Respondent Assessee By : Mr. Hitesh Jain, Ar Revenue By : Mrs. Smita Nair, Dr Date Of Hearing : 21/06/2022 Date Of Pronouncement : 05/07/2022

For Appellant: Mr. Hitesh Jain, ARFor Respondent: Mrs. Smita Nair, DR
Section 36(1)Section 36(1)(iii)

pool of funds. Hence proportionate interest utilized from common pool of funds. Hence proportionate interest is required to be disallowed in accordance with section 36(1)(iii). is required to be disallowed in accordance with section 36(1)(iii). is required to be disallowed in accordance with section 36(1 ... against investment and adjusted against investment and excess investment over own funds, investment over own funds, can only be liable to disallowance under section 36(1)(iii) of the can only be liable to disallowance under section 36(1)(iii) of the can only be liable to disallowance under section

Dy CIT CC 6(4), Mumbai vs. Arshiya Ltd., Mumbai

In the result, the present appeal by Revenue (ITA No

ITA 900/MUM/2020[2014-15]Status: DisposedITAT Mumbai05 Jul 2022AY 2014-15
For Appellant: Shri Piyush ChhajedFor Respondent: Shri Sunil Jha
Section 132Section 143(3)Section 14ASection 153ASection 36(1)(iii)

iii of the Appeal are directed against order of CIT(A) deleting the disallowance of interest made by the Assessing Officer under Section 36(1)(iii) of the Act. 7.1. During the assessment proceedings the Assessing Officer observed that the Assessee has borrowed funds ... account of requirements by banks and cooperated debt restructuring. However, the Assessing Officer disallowed INR 33,32,46,991/- as interest under Section 36(1)(iii) of the Act in respect of loans granted by the Assessee to Arshia Industrial Distribution Hub Ltd., Arshiya Northern FTWZ Limited, Arshiya Rail Infrastructure

DCIT Cen Cir 1(2), Mumbai vs. Gitanjali Exports Corporation Ltd, Mumbai

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

ITA 305/MUM/2017[2010-11]Status: DisposedITAT Mumbai04 Jul 2022AY 2010-11
Section 36(1)(iii)Section 92B

following issues : a) Deletion of transfer pricing adjustment relating to interest on excess period of receivables b) Deletion of interest disallowance made under section 36(1)(iii) of the Act. 2. None appeared on behalf of the assessee even though notice of hearing was sent on several occasions ... interest thereon. The Assessing Officer took the view that the interest attributable to the purchase/acquisition of assets cannot be allowed as deduction under section 36(1)(iii) of the Act. Accordingly he computed interest attributable to capital asset/capital work in progress at Rs. 13,54,519/- and disallowed the same

Kisha Telelinks Pvt Ltd, Mumbai vs. ACIT 15(2)(1), Mumbai

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

ITA 478/MUM/2022[2014-15]Status: DisposedITAT Mumbai01 Jul 2022AY 2014-15

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Poojan Mehta, C.AFor Respondent: Shri Asif Karmali, Sr. A.R
Section 250Section 36(1)(iii)

observed that the majority of these loans and advances are given to the sister concern by the assessee and no disallowance under section 36(1)(iii) of the Act has been made by the assessee. Accordingly, the assessee was asked to show cause as to why the interest claimed under ... section 36(1)(iii) of the Act be not disallowed. In the absence of any satifactory reply, the Assessing Officer, vide order dated 29/12/2016, passed under section 143(3) of the Act, disallowed the interest amounting to Rs.6,82,373, and added the same to the total income

DCIT 1(1)(2), Mumbai vs. Forbes & Company Ltd, Mumbai

In the result, appeal filed by the Revenue is treated as partly allowed

ITA 3873/MUM/2017[2011-12]Status: DisposedITAT Mumbai01 Jul 2022AY 2011-12

Bench: Learned Cit(A) & Which Was Partly Allowed.

Section 143(3)Section 14ASection 36(1)(iii)

Disallowance made under section 14A of the I.T. Act b) Disallowance of provisions for inventory written off c) Disallowance of interest under section 36(1)(iii) of the Act d) Disallowance of bad debts written off 2. The assessee is engaged in the business of manufacturing of engineering tools ... advanced interest free loan to its subsidiary, group and associate companies. Accordingly he disallowed proportionate interest expenditure amounting to Rs. 1.47 crore under section 36(1)(iii) of the Act. The Learned CIT(A) noticed that identical disallowance made in A.Y. 2008-09 and 2010-11 has been decided