“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. Bhoomi Construction Projects, Mumbai vs. Asstt. CIT Ward-28(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1828/MUM/2020[2013-14]Status: DisposedITAT Mumbai28 Jun 2022AY 2013-14

For Appellant: Ms. Ritika AgarwalFor Respondent: Shri Aditya Rai (Sr. AR)

Section 36(1)(iii)

under: - “7. We have considered rival submissions and perused the material on record. As could be seen, the AO has made disallowance under section 36(1)(iii) of the Act alleging that interest free loans and advances were given to 8 parties. However, in course of appellate proceedings, learned Commissioner ... advances were provided out of interest free funds available with the assessee, no disallowance out of interest expenditure can be made under section 36(1)(iii) of the Act. Accordingly, we delete the disallowance of Rs. 3,33,722/-. Grounds are allowed.” 6. Therefore, according to her, the disallowance

Tata Housing Development Company Ltd., Mumbai vs. DCIT- 8(3)(1), Mumbai

In the result, the appeal filed by the assessee ITA

ITA 3491/MUM/2019[2015-16]Status: DisposedITAT Mumbai28 Jun 2022AY 2015-16

Bench: Shri Pavan Kumar Gadale & Shri Amarjit Singhm/S Tata Housing Vs. Dcit – 8(3)(1) Development Company Room No. 615, Ltd.,E Block, Voltas Aayakar Bhavan, Compound, Tb Kadam Mk Marg, Marg, Chinchpokli, Mumbai – 400020. Mumbai – 400033. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. :Aaact0191Q Appellant .. Respondent Dcit – 8(3)(1) Vs. M/S. Tata Housing Room No. 615, Aayakar Development Company Bhavan, Ltd.,E Block, Voltas Mk Marg, Compound, Tb Kadam Mumbai – 400020. Marg, Chinchpokli, Mumbai – 400033. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. :Aaact0191Q Appellant .. Respondent

For Appellant: Shri.Madhur Agarwal.ARFor Respondent: Shri.Ajay Kumar. CIT DR

Section 115JSection 143(2)Section 143(3)Section 14ASection 36(1)Section 36(1)(iii)

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT

Mega Custodial Services Limited, Mumbai vs. Deputy Commissioner of Income Tax-10(2)(2), Mumbai

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

ITA 633/MUM/2018[2013-14]Status: DisposedITAT Mumbai28 Jun 2022AY 2013-14

Bench: Shri Aby T. Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Mega Custodial Services Limited V. Dcit – Circle-10(2)(2) 301, Level-3, Ceejay House Room No. 209, 2Nd Floor Shiv Sagar Estate, F-Block Aayakar Bhavan, M.K. Road Dr. Annie Besant Road Mumbai - 400020 Worli, Mumbai – 400018 Pan: Aaacm3508J (Appellant) (Respondent) Assessee By : Shri Navneet Chaudhary Department By : Shri Ram Krishna Kedia

For Appellant: Shri Navneet ChaudharyFor Respondent: Shri Ram Krishna Kedia

Section 143(1)Section 143(2)Section 36(1)(iii)

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, HON'BLE JUDICIAL MEMBER AND SHRI

M/S. Nicholas Piramal India Ltd, Mumbai vs. The ACIT Cur 7(1)

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

ITA 769/MUM/2008[2004-2005]Status: DisposedITAT Mumbai28 Jun 2022AY 2004-2005

Bench: Shri Pavan Kumar Gadale & Shri S Rifaur Rahmanpiramal Enterprises Ltd Vs. Acit, Circle – 7(1) (Formerly Known As Aayakar Bhavan Piramal Healthcare Ltd) Mumbai – 400020. (Before Known As Nicholas Piramal Ind) Piramal Tower, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400013. Pan/Gir No. : Aaacn4538P Appellant .. Respondent Dcit, Circle – 7(1) Vs. Piramal Enterprises Ltd Aayakar Bhyavan (Formerly Known As Mumbai – 400 020. Piramal Healthcare Ltd) (Before Known As Nicholas Piramal Ind) Piramal Tower, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013. Pan/Gir No. : Aaacn4538P Assessee By : Mr.Ronak Doshi & Ms.Manshi Padhiyar.Ar Revenue By : Mr.S.N.Kabra.Dr

For Appellant: Mr.Ronak Doshi &For Respondent: Mr.S.N.Kabra.DR

Section 143(3)Section 145Section 32Section 35Section 80

common procurement resulting in lower cost of manufacturing, achieving better cost efficiency, etc. ii. The Appellant had fulfilled all the conditions mentioned in section 36(1)(iii) and as laid down in judicial pronouncements. As per provisions of section 36(1)(iii) as was applicable to the year under appeal ... same. 6.10. We find that when this point was put to the ld DR, he argued that in any case, the proviso to section 36(1)(iii) of the Act would come into operation which reads as under:- Provided that any amount of the interest paid, in respect of capital

DCIT Central Circle-3(1), Mumbai vs. Wind World India Ltd., Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1910/MUM/2019[2014-15]Status: DisposedITAT Mumbai24 Jun 2022AY 2014-15

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

correct in law in deleting the disallowance of interest of ₹2,03,17,621/- made by the Assessing Officer under Section 36(1)(iii) for interest free loans and advances to its subsidiaries on account of sufficient availability of interest free funds in view of the decision

Wind World India Limitead, Mumbai vs. DCIT Central Circle-3(1), Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1470/MUM/2019[2014-15]Status: DisposedITAT Mumbai24 Jun 2022AY 2014-15

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

Wind World India Limitead, Mumbai vs. DCIT Central Circle-3(1), Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1469/MUM/2019[2013-14]Status: DisposedITAT Mumbai24 Jun 2022AY 2013-14

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

Wind World India Limited, Mumbai vs. DCIT Central Circle 3 (1), Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1468/MUM/2019[2012-13]Status: DisposedITAT Mumbai24 Jun 2022AY 2012-13

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

Wind World India Limited, Mumbai vs. DCIT Central Circle 3 (1), Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1467/MUM/2019[2011-12]Status: DisposedITAT Mumbai24 Jun 2022AY 2011-12

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

Wind World India Ltd., Mumbai vs. DCIT Central Circle-3(1), Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1466/MUM/2019[2010-11]Status: DisposedITAT Mumbai24 Jun 2022AY 2010-11

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

Wind World India Ltd., Mumbai vs. DCIT Central Circle-3(1), Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1465/MUM/2019[2007-08]Status: DisposedITAT Mumbai24 Jun 2022AY 2007-08

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

DCIT - CC 3 (1), Mumbai vs. Wind World India Ltd., Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1355/MUM/2019[2013-14]Status: DisposedITAT Mumbai24 Jun 2022AY 2013-14

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

DCIT Central Circle-3(1), Mumbai vs. Wind World India Ltd., Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1354/MUM/2019[2012-13]Status: DisposedITAT Mumbai24 Jun 2022AY 2012-13

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

DCIT - CC 3(1), Mumbai vs. Wind World India Ltd., Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1353/MUM/2019[2011-12]Status: DisposedITAT Mumbai24 Jun 2022AY 2011-12

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

DCIT Central Circle 3 (1), Mumbai vs. Wind World India Limited, Mumbai

In the result, appeal filed by the assessee in ITA number

ITA 1352/MUM/2019[2010-11]Status: DisposedITAT Mumbai24 Jun 2022AY 2010-11

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Ms. Dr. Pallavi Darade, CIT DR

Section 132Section 143(3)Section 144Section 153ASection 243CSection 245DSection 92C

M/S. Hemavathy Power & Light Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 3(1)(1), Bangalore

In the result, the appeals of the assessee for assessment year

ITA 1820/BANG/2019[2012-13]Status: DisposedITAT Bangalore23 Jun 2022AY 2012-13

Bench: Shri N.V. Vasudevan, Vice Preseident & Ms. Padmavathy S

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl.CIT(DR)(ITAT)

Section 32Section 32(1)(ii)Section 36(1)(iii)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESEIDENT AND Ms. PADMAVATHY S, ACCOUNTANT

M/S Hemavathy Power & Light Pvt Ltd, Bangalore vs. Income Tax Officer Ward-3(1)(3), Bangalore

In the result, the appeals of the assessee for assessment year

ITA 2719/BANG/2018[2014-15]Status: DisposedITAT Bangalore23 Jun 2022AY 2014-15

Bench: Shri N.V. Vasudevan, Vice Preseident & Ms. Padmavathy S

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl.CIT(DR)(ITAT)

Section 32Section 32(1)(ii)Section 36(1)(iii)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESEIDENT AND Ms. PADMAVATHY S, ACCOUNTANT

M/S Hemavathy Power & Light Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-3(1)(2), Bangalore

In the result, the appeals of the assessee for assessment year

ITA 2718/BANG/2018[2013-14]Status: DisposedITAT Bangalore23 Jun 2022AY 2013-14

Bench: Shri N.V. Vasudevan, Vice Preseident & Ms. Padmavathy S

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl.CIT(DR)(ITAT)

Section 32Section 32(1)(ii)Section 36(1)(iii)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESEIDENT AND Ms. PADMAVATHY S, ACCOUNTANT

M/S Hemavathy Power & Light Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-11(4), Bangalore

In the result, the appeals of the assessee for assessment year

ITA 2717/BANG/2018[2011-12]Status: DisposedITAT Bangalore23 Jun 2022AY 2011-12

Bench: Shri N.V. Vasudevan, Vice Preseident & Ms. Padmavathy S

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl.CIT(DR)(ITAT)

Section 32Section 32(1)(ii)Section 36(1)(iii)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESEIDENT AND Ms. PADMAVATHY S, ACCOUNTANT

Nitin Corporation, Mumbai vs. ITO -20(2) (4), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 2029/MUM/2021[2015-16]Status: DisposedITAT Mumbai21 Jun 2022AY 2015-16

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Nitin Corporation V. Income Tax Officer – 20(2)(4) 607-C, Samarth, Kharegeghat Road Room No. 220 Dadar, Mumbai - 400014 Piramal Chambers, Lalbaug Mumbai – 400 012 Pan: Aaafn0748C (Appellant) (Respondent) Assessee By : Shri Narayan Atal Department By : Shri Suresh Periasamy

For Appellant: Shri Narayan AtalFor Respondent: Shri Suresh Periasamy

Section 36(1)(iii)

firm, and it had not discharged onus to prove that claim towards interest expenditure incurred was for business purposes in terms of section 36(1)(iii), disallowed proportionate interest expenses. Since assessee had not furnished any fund flow statement and material on record showed that no interest free own funds