“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)

Synergy Appliances Private Limited, Mumbai vs. DCIT 3 (3) (2), Mumbai

In the result appeal filed by the assessee is allowed for statistical purposes

ITA 5857/MUM/2019[2014-15]Status: DisposedITAT Mumbai21 Jun 2022AY 2014-15

Section 36(1)(iii)

decision of learned CIT(A) in confirming the disallowance of interest expenditure of Rs. 2.55 crore made by the Assessing Officer under section 36(1)(iii) of the I.T. Act. 3. None appeared on behalf of the assessee even though notice of hearing was sent to the assessee on several

Elecroparts (India) Pvt. Ltd., Mumbai vs. Asstt. CIT 3 (1)(2), Mumbai

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

ITA 5839/MUM/2019[2013-14]Status: DisposedITAT Mumbai21 Jun 2022AY 2013-14

Section 14ASection 36(1)(iii)

relates to A.Y. 2013-14. 2. The assessee is aggrieved by the decision of learned CIT(A) in confirming the disallowance made under section 36(1)(iii) and also addition made under section 14A of the I.T. Act. 3. None appeared on behalf of the assessee. Notice sent by registered

M/S Artendz Pabs Pvt Ltd., Mumbai vs. DCIT Circle-12(1)(1), Mumbai

In the result, ground of appeal No

ITA 2475/MUM/2019[2013-14]Status: DisposedITAT Mumbai21 Jun 2022AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Ble

For Appellant: NoneFor Respondent: Shri Mehul Jain

Section 148Section 36(1)(iii)

fixed assets has been held to be bogus, the interest relatable to the fund siphoned off is not allowable .as expenditure under section 36(1)(iii) of the Act. I, therefore, confirm the disallowance made in this regard by the AO. In the result, ground of appeal

M/S Artendz Pabs Pvt Ltd., Mumbai vs. DCIT Circle-12(1)(1), Mumbai

In the result, ground of appeal No

ITA 2474/MUM/2019[2012-13]Status: DisposedITAT Mumbai21 Jun 2022AY 2012-13

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Ble

For Appellant: NoneFor Respondent: Shri Mehul Jain

Section 148Section 36(1)(iii)

M/S Artendz Pabs Pvt Ltd., Mumbai vs. DCIT Circle-12(1)(1), Mumbai

In the result, ground of appeal No

ITA 2473/MUM/2019[2011-12]Status: DisposedITAT Mumbai21 Jun 2022AY 2011-12

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Ble

For Appellant: NoneFor Respondent: Shri Mehul Jain

Section 148Section 36(1)(iii)

Jenam Enterprises P. Ltd., Mumbai vs. The Asstt. CIT, Range-6(3)(2), Mumbai

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

ITA 387/MUM/2021[2016-17]Status: DisposedITAT Mumbai17 Jun 2022AY 2016-17

Bench: Shri M. Balaganesh () & Shri Pavan Kumar Gadale () Assessment Year: 2016-17

For Appellant: NoneFor Respondent: Mr. S.N. Kabra, DR

Section 143(2)Section 143(3)Section 36Section 36(1)Section 36(1)(iii)Section 41(1)

Notional interest added to the total income on debit balances of sundry 3 Jenam Enterprises Private Limited creditors' and taxed under section 36(1) (iii) of the Act; The Assessing Officer / the Commissioner of Income-tax (Appeals) have erred in taxing the notional interest at the rate ... balances of sundry creditors' contending that appellant ought to have charged interest on debit balances of sundry creditors' and taxed the same under section 36(1)(iii) of the Act and accordingly disallowed a sum of Rs.8,58,074 added to the total income declared by the Appellant. The Appellant

Sri. Venkateswara Developers, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 7(2)(1), Bengaluru

In the result, both the appeals filed by the assessee are partly allowed for statistical purposes

ITA 2474/BANG/2019[2014-15]Status: DisposedITAT Bangalore16 Jun 2022AY 2014-15

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri S.V. Ravishankar, A.RFor Respondent: Shri Narayana K.R., DR

Section 143(3)Section 24Section 251(2)Section 271(1)(C)Section 271(1)(c)

opinion, the assessee has to demonstrate the usage of the borrowed funds for the purpose of business as laid out in section 36(1)(iii) of the Act. Accordingly, the issue in dispute is remitted to the file of Ld. CIT(A) to reconsider the ITA No.1910 & 2474/Bang/2019 Sri Venkateswara

Sri Venkateswara Developers, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 7(2)(1), Bangalore

In the result, both the appeals filed by the assessee are partly allowed for statistical purposes

ITA 1910/BANG/2019[2014-15]Status: DisposedITAT Bangalore16 Jun 2022AY 2014-15

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri S.V. Ravishankar, A.RFor Respondent: Shri Narayana K.R., DR

Section 143(3)Section 24Section 251(2)Section 271(1)(C)Section 271(1)(c)

Talisman Securities Pvt. Ltd, Mumbai vs. DCIT (Cent Cir -7(2), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 2303/MUM/2021[2012-13]Status: DisposedITAT Mumbai10 Jun 2022AY 2012-13

Section 133(6)Section 143(3)Section 68

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

M/S Shagurn Constructions, Mumbai vs. ACIT (OSD), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4177/MUM/2019[2015-16]Status: DisposedITAT Mumbai08 Jun 2022AY 2015-16

Section 143(3)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER

Icici Home Finance Company Ltd, Mumbai vs. Addl CIT 10(1), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1325/MUM/2013[2009-10]Status: DisposedITAT Mumbai03 Jun 2022AY 2009-10

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Aarti VissanjiFor Respondent: R.A. Dhyani

Section 14ASection 201Section 250Section 36(1)(viii)Section 36(1)(viil)Section 37(1)

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, HON'BLE JUDICIAL MEMBER AND SHRI S

Deloitte Touche Tohmatsu India LLP (Sucessor of Delotte Touche Tohmatsu India Pvt. Ltd, Mumbai vs. ACIT -Cir 6(2) (1), Mumbai

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

ITA 9/MUM/2022[2012-13]Status: DisposedITAT Mumbai31 May 2022AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.09/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2012-13) Deloitte Touche Tohmatsu बिधम/ Acit-Circle 6(2)(1) India Llp (Successor Of Room No.504, 5Th Floor, Vs. Delotte Touche Tohmatsu Aayakar Bhavan, India Pvt. Ltd.) Maharshi Karve Road, One International Centre, Churchgate, Mumbai- Tower-3, 32Nd Floor, 400020. Senapati Bapat Marg, Elphinstone Road (W), Mumbai-400013. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aalfd7157J (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Ketan Ved Revenue By: Ms. R. M. Madhavi (Dr) सुनवाई की तारीख / Date Of Hearing: 23/05/2022 घोषणा की तारीख /Date Of Pronouncement: 09/05/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) (Nfac), Delhi Dated 15.11.2021 For The Assessment Year 2012-13. 2. At The Outset, The Ld. Ar Of The Assessee Drew Our Attention To The Fact That The First Appellate Authority (Nfac) Has Passed The Order Without Giving Proper Opportunity To The Assessee. According To The Ld. Ar, The Assessee Had Filed All The Documents Sought For By The Cit(A) As Well As Had Filed Application Dated 23.01.2019 For Admission Of Additional Evidences (Refer Page No. 5 To 8 Of The Paper Book) As Well As Copy Of Letter Dated 25.10.2021 Uploaded On Income Tax E- Filing Portal On 09.10.2021 In Response To The Notices Dated 01.10.2021 & 11.10.2021 Respectively (Page No. 1 To 4 Of The Paper Book)

For Appellant: Shri Ketan VedFor Respondent: Ms. R. M. Madhavi (DR)

Section 36(1)(iii)

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM AND SHRI S. RIFAUR RAHMAN

M/S Xindia Steels Limited, Koppal vs. The Assistant Commissioner of Income Tax Circle-1, Bellary

In the result, the appeal by the assessee is allowed

ITA 361/BANG/2019[2014-15]Status: DisposedITAT Bangalore31 May 2022AY 2014-15

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2014-15

For Appellant: Smt. Soumya K., AdvocateFor Respondent: Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru

Section 143

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

M/S. Bagadia Properties Private Limited, Bangalore vs. Income Tax Officer, Ward - 1(1)(3), Bangalore

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

ITA 1248/BANG/2019[2014-15]Status: DisposedITAT Bangalore31 May 2022AY 2014-15

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranassessment Year:2014-15 M/S. Bagadia Properties Private Limited, 1097 (Old) 58 (New), 18Th B Main Road, Ito, 5H Block, Rajajinagar, Ward – 1(1)(3), Vs. Bengaluru – 560 010. Bengaluru. Pan No : Aadcb 3328 E Appellant Respondent Appellant By : Shri. Shivarama Iyer, Ca Respondent By : Shri. Sankar Ganesh, Jcit(Dr)(Itat), Bengaluru. Date Of Hearing : 10.03.2022 Date Of Pronouncement : 31.05.2022 O R D E R Per B.R. Baskaran: The Assessee Has Filed This Appeal Challenging The Order Dated 01-03-2019 Passed By Ld Cit(A)-1, Bengaluru & It Relates To The Assessment Year 2014-15. Though The Assessee Has Raised Many Grounds, All Of Them Are Related To A Single Issue, Viz., Disallowance Of Interest Expenses Relating To Non-Convertible Debentures.

For Appellant: Shri. Shivarama Iyer, CAFor Respondent: Shri. Sankar Ganesh, JCIT(DR)(ITAT), Bengaluru

IN THE INCOME TAX APPELLATE TRIBUNAL “A’’BENCH: BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI B. R

Deputy Commissioner of Income Tax, Circle- 7(1)(2), Bangalore vs. M/S. Valdel Projects Corporation Private Limited, Bangalore

In the result, the appeal by the revenue is dismissed

ITA 2515/BANG/2019[2015-16]Status: DisposedITAT Bangalore30 May 2022AY 2015-16

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2015-16

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)Section 36(1)(iii)

companies and not for immediate return. The financial assistance given is in the interest of commercial expediency. The only condition laid down in section 36(1)(iii) of the Act is that interest should be paid on a loan that is used for the purpose of business and since

Levi Staruss (India) Private Limited, Bangalore vs. DCIT, Bangalore

In the result, the appeal filed by assessee stands partly allowed as indicated hereinabove

ITA 695/BANG/2016[2011-12]Status: DisposedITAT Bangalore30 May 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 695/Bang/2016 Assessment Year : 2011-12 M/S. Levi Strauss (India) Pvt. Ltd., The Deputy Sjr Cyber, 7Th Floor, Commissioner Of No. 22, Laskar Hosur Road, Income Tax, Adugodi, Circle 4 (1)(1), Bangalore – 560 030. Vs. Bangalore. Pan: Aaacl3092Q Appellant Respondent Assessee By : Shri Nageswar Rao, Advocate : Dr. Manjunath Karkihalli, Revenue By Cit Dr Date Of Hearing : 31-03-2022 Date Of Pronouncement : 30-05-2022 Order Per Beena Pillaipresent Appeal Is Filed By The Assessee Against The Final Assessment Order Dated 28.01.2016 U/S. 143(3) R.W.S. 144C Of The Act By The Ld.Dcit, Circle – 4 (1)(1), Bangalore For Assessment Year 2011-12 On Following Grounds Of Appeal. “Based On The Facts & Circumstances Of The Case & In Law, Levi Strauss (India) Private Limited (Hereinafter Referred To As "Appellant") Respectfully Craves Leave To Prefer An Appeal Against The Order Passed By The Learned Assessing Officer (Hereinafter Referred To As The "Learned Ao") Under Section 143(3) Read With Section 144C Of The Income-Tax Act, 1961("The Act") On The Following Grounds:

For Appellant: Shri Nageswar Rao, Advocate

Section 143(3)Section 144C

furnish details: 18. The learned AO has erred, in law and in facts, by disallowing notional interest of Rs. 2,34,000 under section 36(1)(iii) of the Act on the salary advance given to the employee on the basis that the transaction lacked business expediency: 19. The learned

DCIT, Bangalore vs. M/S Jupiter Capital Pvt. Ltd., Bangalore

Accordingly, appeal of the Revenue as well as the assessee are dismissed

ITA 1219/BANG/2016[2011-12]Status: DisposedITAT Bangalore30 May 2022AY 2011-12

Bench: Shri N. V. Vasudevan & Ms. Padmavathy S

For Appellant: Smt. Sheetal Borkar, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 14ASection 36(1)(iii)Section 40A(2)

free income because of availability of surplus interest free funds with the assessee. The aforesaid finding would equally apply to the disallowance under section 36(1)(iii) of the Act also and therefore on the same reasoning, the disallowance deserves to be deleted and was rightly deleted