“Section 37(1)”

Section References (mined)Section 37Section 37(1)4,308 judgments

The decision most relied on for Section 37(1) is CIT v. Reliance Utilities & Power Ltd. (313 ITR 340), cited in 2,118 judgments on BharatTax.

Leading authorities on Section 37(1)

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.

Goetze (India) Ltd. v. CIT

284 ITR 323 · 2006 · Supreme Court

1,842

citing judgments

An assessee cannot raise a new claim or a claim not made in the original or revised return of income for the first time directly before the Assessing Officer during assessment proceedings.

Maxopp Investment Ltd. v. CIT

402 ITR 640 · 2018 · Supreme Court

1,596

citing judgments

Disallowance under Section 14A is not automatic and requires the Assessing Officer to record satisfaction before applying Rule 8D. Only investments yielding exempt income are considered for disallowance, irrespective of their strategic nature.

Cheminvest Ltd. v. CIT

378 ITR 33 · 2015 · High Court

1,569

citing judgments

A disallowance under Section 14A of the Income-tax Act, 1961, for expenditure incurred in relation to exempt income cannot be made if the assessee has not earned any exempt income during the relevant previous year.

Checkmate Services Pvt. Ltd. v. CIT

143 Taxmann.com 178 · 2022 · Supreme Court

1,392

citing judgments

Employee contributions to provident fund and ESI deposited by an employer beyond the due dates prescribed under the respective special Acts are not allowable as a deduction under section 36(1)(va) of the Income-tax Act, 1961. Such disallowance can be made during processing under section 143(1).

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.

Godrej & Boyce Mfg. Co. Ltd. v. DCIT

328 ITR 81 · 2010 · High Court

1,183

citing judgments

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

CIT v. Woodward Governor India Pvt. Ltd.

312 ITR 254 · 2009 · Supreme Court

968

citing judgments

Foreign exchange fluctuations, whether gains or losses, are inextricably linked to the underlying business transaction and must be accounted for under the mercantile system. The Supreme Court also affirmed the standard accounting principle of valuing stock at cost or net realisable value, whichever is lower.

Judgments citing Section 37(1)

Deputy Commissioner of Income Tax, Circle-3(1)(1), Bengaluru vs. Infosys Limited, Bengaluru

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

ITA 245/BANG/2024[2019-20]Status: DisposedITAT Bangalore06 Aug 2025AY 2019-20

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2019-20

For Appellant: Sri Padam Chand Khincha – CAFor Respondent: Smt. Srinandini Das – CIT - DR

Section 1Section 10ASection 155Section 250

time of hearing, the assessee also filed a petition for admission of additional grounds of appeal regarding the claim of deduction under section 37(1) of the Act in respect of foreign tax credit not eligible for relief ITA No.245/Bang/2024 Infosys Limited Page 5 of 34 under section ... which is reproduced below for ease of reference & convenience- 1. The learned assessing officer be directed to allow deduction under section 37(1) of the Act in respect of tax paid in a foreign country amounting to Rs. 16,67,20,749 which is not eligible for relief/benefit under section

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

Accordingly, the appeal filed by the assessee is also allowed for statistical purposes

ITA 1532/BANG/2024[2021-22]Status: DisposedITAT Bangalore06 Aug 2025AY 2021-22

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Sri Padam Chand Khincha – CAFor Respondent: Smt Srinandini Das – CIT - DR

Section 10ASection 143(3)Section 234BSection 250

also filed the additional grounds of appeal at the time of hearing of the appeal with regard to the claim of deduction under section 37(1) of the Act in respect of foreign tax credit not eligible for relief under section 90 or 91 of the Act. ITA Nos.1531 & 1532/Bang/2024 ... filed the additional grounds of appeal at the time of hearing of the appeal with regard to the claim of deduction under section 37(1) of the Act in respect of foreign taxes paid amounting to Rs. 17,94,43,704/- which is not eligible for relief under section

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

Accordingly, the appeal filed by the assessee is also allowed for statistical purposes

ITA 1531/BANG/2024[2020-21]Status: DisposedITAT Bangalore06 Aug 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Sri Padam Chand Khincha – CAFor Respondent: Smt Srinandini Das – CIT - DR

Section 10ASection 143(3)Section 234BSection 250

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

ITA 1530/BANG/2024[2013-14]Status: DisposedITAT Bangalore06 Aug 2025AY 2013-14

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year : 2013-14

For Appellant: Sri Padam Chand Khincha – CAFor Respondent: Smt Srinandini Das – CIT - DR

Section 10ASection 143(3)Section 250Section 254Section 80A(5)

also filed the additional grounds of appeal at the time of hearing of the appeal with regard to the claim of deduction under section 37(1) of the Act in respect of foreign tax credit not eligible for relief under section 90 or 91 of the Act. 6. The ground ... filed the additional grounds of appeal at the time of hearing of the appeal with regard to the claim of deduction under section 37(1) of the Act in respect of foreign taxes paid amounting to Rs. 9,67,76,097/- which is not eligible for relief under section

Infosys Limited, Bangalore vs. Deputy Commissioner of Income-Tax, Circle-3(1)(1), Bangalore

ITA 881/BANG/2023[2019-20]Status: DisposedITAT Bangalore06 Aug 2025AY 2019-20

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

Section 1Section 10ASection 155Section 250

time of hearing, the assessee also filed a petition for admission of additional grounds of appeal regarding the claim of deduction under section 37(1) of the Act in respect of foreign tax credit not eligible for relief Page 5 of 34 under section ... which is reproduced below for ease of reference & convenience- 1. The learned assessing officer be directed to allow deduction under section 37(1) of the Act in respect of tax paid in a foreign country amounting to Rs. 16,67,20,749 which is not eligible for relief/benefit under section

Ravi Dyeware Company Private Limited, Nariman Point, Mumbai, Maharashtra vs. DCIT- 3(3)(1), Mumbai, Aayakar Bhawan

In the result, appeal filed by the assessee is allowed

ITA 2900/MUM/2025[2020-21]Status: DisposedITAT Mumbai06 Aug 2025AY 2020-21

Bench: Hon’Ble Shri Sandeep Gosain & Hon’Ble Shri Girish Agrawalravi Dyeware Co. Pvt Ltd., Vs. Dcit – 3(3)(1) 121 Atlanta, Vs Marg Aayakar Bhavan Nariman Point, Mumbai – Mumbai. 400021. Pan/Gir No. Aaacr4665F (Applicant) (Respondent)

Section 142(1)Section 263Section 37(1)Section 80G

Technologies (International) (P.) Ltd. v. ACIT [(2024) 160 taxmann.com 238 (Delhi-Trib.)], wherein it was held that CSR expenditure, being specifically disallowed under Section 37(1) of the Act, cannot be simultaneously claimed under Section 80G. According to the Revenue, such a statutory bar operates 13 Ravi Dyeware ... respect of the amount forming part of Corporate Social Responsibility (CSR) expenditure, which had otherwise been disallowed under Section 37(1) of the Act. Before us, the learned counsel for the assessee has drawn attention to the inquiries conducted by the Assessing Officer through the issuance of notice under Section

Deputy Commissioner of Income Tax, Circle-1(1), New Delhi, Delhi vs. Aadharshilla Contractors Pvt Ltd, Delhi

In the result, the grounds raised by the Revenue are dismissed

ITA 4208/DEL/2024[2018-19]Status: DisposedITAT Delhi06 Aug 2025AY 2018-19

Bench: Shri Challa Nagendra Prasad & Shri S. Rifaur Rahmanaadharshilla Contractors Private Limited, Vs. Dcit, Circle 1 (1), 2Nd Floor, Shahdara Metro Station, Delhi. Parsvnath Tower, Delhi – 110 032. (Pan : Aaeca3452D) Dcit, Circle 1 (1), Vs. Aadharshilla Contractors Private Limited, 2Nd Floor, Shahdara Metro Station, Delhi. Parsvnath Tower, Delhi – 110 032. (Pan : Aaeca3452D) (Appellant) (Respondent) Assessee By : Shri Rajat Jain, Ca Shri Akshat Jain, Ca Revenue By : Shri Ajay Kumar Arora, Sr. Dr Date Of Hearing : 28.05.2025 Date Of Order : 06.08.2025 O R D E R

For Appellant: Shri Rajat Jain, CAFor Respondent: Shri Ajay Kumar Arora, Sr. DR

case, the ld.CIT (A) has erred in deleting the addition on account of disallowance of interest of Rs.35,06,436/- under section 37(1) of the Act without appreciating the fact that the interest was never paid by the assessee. 2. On the facts and circumstances of the case

Aadharshilla Contractors Private Limited, Shahdara, Delhi vs. Deputy Commissioner of Income Tax, Circle 1(1), Delhi

In the result, the grounds raised by the Revenue are dismissed

ITA 4137/DEL/2024[2017-18]Status: DisposedITAT Delhi06 Aug 2025AY 2017-18

For Appellant: Shri Rajat Jain, CAFor Respondent: Shri Ajay Kumar Arora, Sr. DR

Gallagher Insurance Brokers Private Limited, Mumbai vs. The Principal Commissioner of Income Tax-3, Mumbai

In the result, we set-aside the said findings of the ld PCIT as well

ITA 3778/MUM/2025[2020-21]Status: DisposedITAT Mumbai05 Aug 2025AY 2020-21

Bench: Shri Vikram Singh Yadav & Shri Sandeep Gosainassessment Year : 2020-21 Gallagher Insurance Brokers The Principal Commissioner Of Private Limited, Income Tax-3, Unit No. 34, Tower-3, Vs. Room No. 612, 6Th Floor, 4Th Floor, Wing-B, Aayakar Bhavan, Kohinoor City Mall, Maharshi Karve Road, Kohinoor City, Mumbai-400020. Kirol Road, Kurla West, Mumbai-400070. Pan : Aaaci7196J (Appellant) (Respondent) Assessee By : Shri Mahadev P. Lohia Revenue By : Shri Swapnil Choudhary Date Of Hearing : 31-07-2025 Date Of Pronouncement : 05-08-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Order Of The Learned Principal Commissioner Of Income Tax-Mumbai-3 [„Ld.Pcit‟], Dated 28-03-2025 Passed U/S. 263 Of The Income Tax Act, 1961 („The Act‟), Pertaining To Assessment Year (Ay) 2020-21. 2. During The Course Of Hearing, The Ld.Ar Taken Us Through The Findings Of The Ld.Pcit, Which Are Contained At Paragraph No. 7.2 & 7.3 Of The Impugned Order & The Contents Thereof Read As Under:

For Appellant: Shri Mahadev P. LohiaFor Respondent: Shri Swapnil Choudhary

Section 263Section 40aSection 80G

this would result in subsidizing around one-third of such expenses by the Government by way of tax expenditure. 13.3 The provisions of section 37(1) of the Income-tax Act provide that deduction for any expenditure, which is not mentioned specifically in section 30 to section ... Incometax Act. Therefore, in order to provide certainty on this issue, it is proposed to clarify that for the purposes of section 37(1) any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall

Abhay Ispat (India) Private Limited, Mumbai vs. Principal Commissioner of Income Tax Officer, Mumbai - 6, Mumbai

In the result, the appeal by the assessee is allowed

ITA 3575/MUM/2025[2020-21]Status: DisposedITAT Mumbai05 Aug 2025AY 2020-21

Bench: Shri Om Prakash Kantshri Sandeep Singh Karhail

For Appellant: Shri Gaurav KabraFor Respondent: Shri Rajesh Kumar Yadav, CIT-DR

Section 142(1)Section 143(2)Section 143(3)Section 263Section 37Section 37(1)Section 80G

said issue. In response, the assessee submitted that it spent ₹ 1,55,000/- towards CSR, which was suo-moto disallowed under section 37(1) of the Act. Further, the assessee submitted that it claimed deduction under section 80G of the Act to the tune of ₹ 77,500/- (being ... assessee submitted that the CSR expenditure is eligible for deduction under section 80G of the Act, even if the expenditure was disallowed under section 37(1) of the Act by virtue of the provisions of Explanation 2 to section 37 of the Act. In support of its submission, the assessee

Coral India Finance & Housing Limited, Mumbai vs. The Principal Commissioner of Income Tax - 3, Mumbai

In the result, the appeal filed by the assessee is hereby

ITA 2496/MUM/2025[2020-21]Status: DisposedITAT Mumbai05 Aug 2025AY 2020-21

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

For Appellant: Shri V K Ginde, ARFor Respondent: Shri R A Dhyani, (CIT-DR)

Section 135Section 142(1)Section 143Section 143(3)Section 263Section 37Section 37(1)Section 80GSection 80G(2)(a)

from business. Deduction u/s.80G comes into play at the time of computing taxable income. The disallowance of CSR expenditure under Explanation 2 to Section 37(1) applies only in the context of determining business income while determining allowable or disallowable expenses incurred for business purpose. The embargo created by Explanation ... part of regular business expenditure while computing income under the head business. So, it can be clearly seen that this Explanation 2 to section 37(1) which denies deduction for CSR expenses by way of business expenditure is applicable only to the extent of computing 'business income' under Chapter

Dy..C.I.T., Bangalore vs. M/S State Bank of Mysore, Bangalore

In the result, the appeal of the Revenue Ground-3 is dismissed

ITA 683/BANG/2015[2010-11]Status: DisposedITAT Mumbai05 Aug 2025AY 2010-11

Bench: Shri Narendra Kumar Billaiya, Account Member & Shri Anikesh Banerjee

For Appellant: Shri Ketan Ved & Ninad PatadeFor Respondent: Shri P.C. Chhotaray, Spl. Counsel

Section 143(3)Section 250Section 36(1)(vii)Section 36(1)(viia)Section 41(1)Section 41(4)

observed that the aforementioned expenditure is related to business and is of revenue nature and accordingly. the same should have been allowed under section 37(1) of the Act.” The revenue has raised the following grounds: - ITA No. 683/Bang/2015 “1. The order of Ld. CIT(A) is opposed ... provision is duly created towards an ascertained liability based on actuarial valuation and hence, the same ought to be allowed as deduction under section 37(1) of the Act. Since the same are not contingent in nature, the reliance is placed by the assesse in the assessee's own case

State Bank of Mysore, Bangalore vs. JCIT, Bangalore

In the result, the appeal of the Revenue Ground-3 is dismissed

ITA 660/BANG/2015[2010-11]Status: DisposedITAT Mumbai05 Aug 2025AY 2010-11

Bench: Shri Narendra Kumar Billaiya, Account Member & Shri Anikesh Banerjeestate Bank Of India Vs Joint Commissioner Of Income-Tax, (Erstwhile State Bank Of Large Tax Payers Unit, Bangalore Mysore Prior To Merger) Local Head Office Compliance Department, 4Th Floor, 65, St. Marks Road, Bangalore-560 001 Pan: Aaccs0155P Appellant Respondent Deputy Commissioner Of Vs State Bank Of Mysore Income-Tax, Ltu, Circle-1, Head Office, Finance & Accounts Bangalore Department, Kg Road, Bangalore- 560 009 Pan: Aaccs0155P Appellant Respondent

For Appellant: Shri Ketan Ved & Ninad PatadeFor Respondent: Shri P.C. Chhotaray, Spl. Counsel

Section 143(3)Section 250Section 36(1)(vii)Section 36(1)(viia)Section 41(1)Section 41(4)

observed that the aforementioned expenditure is related to business and is of revenue nature and accordingly. the same should have been allowed under section 37(1) of the Act.” 2.1 The revenue has raised the following grounds: - “1. The order of Ld. CIT(A) is opposed to law and facts ... provision is duly created towards an ascertained liability based on actuarial valuation and hence, the same ought to be allowed as deduction under section 37(1) of the Act. Since the same are not contingent in nature, the reliance is placed by the assesse in the assessee’s own case

Eris Lifesciences Limited, Ahmedabad vs. The PCIT, Ahmedabad-1, Ahmedabad

Accordingly, the appeal of the assessee is also allowed for A

ITA 1038/AHD/2025[2021-22]Status: DisposedITAT Ahmedabad04 Aug 2025AY 2021-22

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Biren Shah, ARFor Respondent: Shri R P Rastogi, CIT-DR

Section 143Section 143(3)Section 144BSection 14ASection 263

public harm caused by pharmaceutical companies offering prohibited freebies to Doctors, the Principal Commissioner held that such expenditures are not allowable under section 37(1) of the Act since they are prohibited by law. It was also noted that the A.O. neither verified the recipient list in detail nor provided

Eris Lifesciences Limited, Ahmedabad vs. The PCIT, Ahmedabad-1, Ahmedabad

Accordingly, the appeal of the assessee is also allowed for A

ITA 1037/AHD/2025[2020-21]Status: DisposedITAT Ahmedabad04 Aug 2025AY 2020-21

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Biren Shah, ARFor Respondent: Shri R P Rastogi, CIT-DR

Section 143Section 143(3)Section 144BSection 14ASection 263

Dy. Commissioner of Income Tax, Central Circle-3(3), Mumbai vs. Prateek Apparels Private Limited, Karnataka

In the result, appeals of the Revenue in ITA No

ITA 3099/MUM/2025[2018-19]Status: DisposedITAT Mumbai04 Aug 2025AY 2018-19

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

For Appellant: Shri Shankarlal Jain & Shri Satish KumarFor Respondent: Shri R A Dhyani, (CIT DR)

Section 132Section 132(4)Section 143(3)Section 153ASection 36(1)(iii)

stage, without resulting in any enduring capital asset, the assessee contended that the expenditure qualifies as revenue in nature and is allowable under Section 37(1) or as a business loss under Section 28 of the Act. He concluded that that no capital asset came into existence. The project ... judicial precedents, it was held that the CWIP write- off of Rs.1,21,65,389/-was allowable as revenue expenditure/business loss under section 37(1) or section 28 of the Act. Accordingly, the addition made by the AO was deleted. 21. Before us, the ld.AR reiterated the same arguments

Dy. Commissioner of Income Tax, Central Circle -3(3), Mumbai vs. Prateek Apparels Private Limited, Karnataka

In the result, appeals of the Revenue in ITA No

ITA 2936/MUM/2025[2014-15]Status: DisposedITAT Mumbai04 Aug 2025AY 2014-15

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

For Appellant: Shri Shankarlal Jain & Shri Satish KumarFor Respondent: Shri R A Dhyani, (CIT DR)

Section 132Section 132(4)Section 143(3)Section 153ASection 36(1)(iii)

Kaushal Anil Shah, Mumbai vs. Pr. CIT-20, Mumbai

In the result, the appeal of the assessee is allowed

ITA 1952/MUM/2025[2021-22]Status: DisposedITAT Mumbai04 Aug 2025AY 2021-22

Bench: Shri Saktijit Dey & Shri Prabhash Shankar

For Appellant: Shri Reepal G. Trashawala,ARFor Respondent: Shri Ritesh Misra,(CIT-DR)

Section 143(3)Section 263Section 271ASection 69C

first appellate authority. Therefore, the ld.PCIT has wrongly assumed jurisdiction over the matter. Moreover, the applicability of the provisions of section 69C or section 37(1) of the Act to the impugned transaction itself is debatable. It is submitted that the assessee in response to the query in this regard

M/S. Dishnet Wireless Ltd., Chennai vs. DCIT, CC - 1 (4), Chennai

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

ITA 283/CHNY/2020[2009-10]Status: DisposedITAT Chennai01 Aug 2025AY 2009-10

Bench: Shri George George Kand Ms Padmavathy S

For Appellant: NoneFor Respondent: Ms.E. Pavuna Sundari, CIT

Section 10Section 14Section 238Section 250

account of breach of conditions mentioned in the license 5-1 ITA No.283/Chny/2020 agreement and a contractual obligation and allowable as deduction under section 37(1) of the Act. 6. Disallowance under section 40(a) (ia) for alleged non-deduction of tax at source on alleged payments to distributors

M/S. Bodal Chemicals Ltd., Ahmedabad vs. The Dy.CIT, Circle-1, Ahmedabad

In the result, the appeals being IT(SS)A No

ITA 318/AHD/2022[2009-10]Status: DisposedITAT Ahmedabad31 Jul 2025AY 2009-10

Bench: Ms. Suchitra Kamble & Shri Narendra Prasad Sinha

For Appellant: Shri S.S. Nagar, ARFor Respondent: Shri Kamlesh Makwana, CIT-DR and Shri B.P. Srivastava, Sr.DR

Section 115JSection 132(1)Section 139(1)Section 139(5)Section 142(1)Section 143(2)Section 143(3)Section 153ASection 153A(1)(a)Section 153A(1)(b)

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