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“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)

Guhana Educational Society, Suryapet vs. ITO, Exemption Ward-1(2), Hyderabad

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

ITA 784/HYD/2025[2017-18]Status: DisposedITAT Hyderabad11 Feb 2026AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdiaआ.अपी.सं /Ita No.784/Hyd/2025 ("नधा"रण वष"/Assessment Year: 2017-18) Guhana Educational Society Vs. Income Tax Officer 2-1-65, Kasturi Bazar Exemption Ward-1(2) Suryapet-508213 Aayakar Bhavan Telangana Basheerbagh, Hyderabad Telangana Pan: Aaaag5294R (Appellant) (Respondent) "नधा"रती "वारा/Assessee By: Shri S. Rama Rao, Advocate राज" व "वारा/Revenue By:: Dr. Sachin Kumar, Sr-Dr सुनवाई क" तार"ख/Date Of Hearing: 29/01/2026 घोषणा क" तार"ख/Pronouncement: 11/02/2026 आदेश/Order Per Madhusudan Sawdia, A.M.: This Appeal Is Filed By Guhana Educational Society (“The Assessee”), Feeling Aggrieved By The Order Passed By The Learned Addl/Jcit(A)-3, Mumbai (“Ld. First Appellate Authority”) Dated 13.03.2025 For The A.Y.2017-18. 2. Assessee Has Raised The Following Grounds Of Appeal: “1. The Order Of The Learned Cit (A) Is Erroneous Both On Facts & In Law; 2. The Learned Cit (A) Erred In Confirming The Action Of The Assessing Officer In Rejecting The Books Of Account & In Resorting To Estimation Of Income At 8% Of The Receipts Of Rs.2,58,90,677/-;

For Appellant: Shri S. Rama Rao, AdvocateFor Respondent: : Dr. Sachin Kumar, SR-DR
Section 10Section 12ASection 143(3)

paid to the RTA, Telangana, for traffic violation, the Ld. DR submitted that the same is clearly hit by Explanation 1 to section 37(1) of the Act and is not allowable. No serious objection was raised by Ld. DR regarding the explanation submitted by the Ld. AR on Xerox ... unable to accept the contention of the assessee. Such payment arises from violation of law and is clearly hit by Explanation 1 to section 37(1) of the Act. The submission of the Ld. DR on this issue is legally sound and is accordingly upheld. Coming to celebration expenses

Namakkal South India Transports, Namakkal vs. ACIT, Circle-1, Namakkal

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

ITA 1992/CHNY/2025[2018-19]Status: DisposedITAT Chennai11 Feb 2026AY 2018-19

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunatha

For Appellant: Shri. T. Vasudevan, AdvocateFor Respondent: Ms. Gouthami Manivasagam, JCIT
Section 133(6)Section 143(3)Section 37

cement during transportation is allowable as business expenditure u/s.37(1) of the Act, or whether the same is hit by the Explanation to section 37(1) as being in the nature of penalty for violation of law. 11. The undisputed facts are that the assessee is a transport operator ... shortage has been attributed to mishandling during transportation, which is an incident intrinsic to the business of a transporter. 16. The Explanation to section 37(1) disallows expenditure incurred for any purpose which is an offence or which is prohibited by law. In the present case, the payment is compensatory

Deputy Commissioner of Income Tax, Circle 4(2), New Delhi, I.P.Estate vs. Beacon Higher Education Services Private Limited, Vasant Kunj, New Delhi

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

ITA 2574/DEL/2024[2017-18]Status: DisposedITAT Delhi11 Feb 2026AY 2017-18

Bench: Shri Vimal Kumar, Hon’Ble & Mrs. Renu Jauhri, Hon’Ble

For Appellant: Shri Y K Kapur, AdvocateFor Respondent: Shri Jitender Singh, CIT DR
Section 143(3)Section 2Section 250Section 32Section 72A

1867_DEL_2020_Beacon Higher Education Services Pvt Ltd VS acit 2574_DEL_2024_DCIT VS Beacon Higher Education Services

Beacon Higher Education Services Pvt Ltd, New Delhi vs. ACIT Circle-4(2), New Delhi

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

ITA 1867/DEL/2020[2016-17]Status: DisposedITAT Delhi11 Feb 2026AY 2016-17

Bench: Shri Vimal Kumar, Hon’Ble & Mrs. Renu Jauhri, Hon’Ble

For Appellant: Shri Y K Kapur, AdvocateFor Respondent: Shri Jitender Singh, CIT DR
Section 143(3)Section 2Section 250Section 32Section 72A

1867_DEL_2020_Beacon Higher Education Services Pvt Ltd VS acit 2574_DEL_2024_DCIT VS Beacon Higher Education Services

DCIT Circle 2(3)(1), Mumbai vs. Ndx P2P Private Limited, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 6490/MUM/2025[2022-23]Status: DisposedITAT Mumbai10 Feb 2026AY 2022-23

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary ()

Section 142(1)Section 143(2)Section 37(1)Section 41(1)Section 44A

assessee had failed to establish that the said expenditure was incurred wholly and exclusively for the purposes of business as required under Section 37(1) of Act, the AO proceeded to disallow 20% of those expenses on the grounds that the assessee failed to produce the comprehensive ledger account ... could not bring forth any evidence to impeach the credibility of the 477-page ledger or the corresponding TDS records. A disallowance under Section 37(1) cannot be sustained on mere suspicion or the subjective dissatisfaction of the AO; it must be rooted in objective evidence. In quasi-judicial proceedings

ACIT-4(1)(1), Mumbai vs. Bnp Paribas India Solutions Pvt Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 5688/MUM/2025[2017-18]Status: DisposedITAT Mumbai09 Feb 2026AY 2017-18

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

For Appellant: Shri Niraj Sheth, AdvocateFor Respondent: Shri Vaibhav Jain, CIT DR
Section 143(3)

discussed above and the judicial precedents, software expenses claim by the assessee are held to be revenue expenses, deductible under the provisions of Section 37(1). These expenses towards software are period cost and recurring in nature, giving annual benefits only. No enduring benefit is derived by the assessee

Zuari Management Services Ltd., Goa vs. Deputy Commisioner of Income-Tax, Circle - 1, Margao

The appeal of the assessee is partly allowed

ITA 85/PAN/2020[2009-10]Status: DisposedITAT Panaji06 Feb 2026AY 2009-10

Bench: Hon’Ble Shri Pavan Kumar Gadale & Shri G. D. Padmahshali

For Appellant: Mr Salil Kapoor [‘Ld. AR]For Respondent: Mr Senthil Kumar N [‘Ld. DR)
Section 143(1)Section 143(3)Section 246ASection 250Section 253(1)Section 263Section 35DSection 36(1)(iii)Section 37(1)

form/structure, could hardly place any corroborative & lucid document to showcase such expenditure were indeed incurred so as to pass the test envisaged by section 37(1) of the Act. 19. In our considered view it is not the quantum, but the eligibility of expense alone determines its deductibility u/s 37 ... 1) of the Act. Such eligibility is proved by adducing documentary evidence and showing the satisfaction of five-fold test laid in section 37(1) of the Act. The burden of proof for placing evidence and in establishing that, the claimed expenditure fulfils all the five conditions of section 37

Deputy Commissioner of Income Tax, Chennai vs. M/S. Chemplast Sanmar Limited, Chennai

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

ITA 2627/CHNY/2025[2017-18]Status: DisposedITAT Chennai06 Feb 2026AY 2017-18

Bench: Shri George George K & Shri Inturi Rama Raoआयकर अपील सं./Ita No.: 2627/Chny/2025 िनधा"रण वष"/Assessment Year: 2017-18 The Deputy Commissioner Of Chemplast Sanmar Limited, Income Tax, Vs. 9, Cathedral Road, Non-Corporate Circle 8, Chennai - 600 086. Chennai Pan: Aaacc 3000F (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Ms. Gouthami Manivasagam, Addl.Cit ""यथ" क" ओर से/Respondent By : Shri R. Vijayaraghavan, Advocate सुनवाई क" तारीख/Date Of Hearing : 03.02.2026 घोषणा क" तारीख/Date Of Pronouncement : 06.02.2026

For Appellant: Ms. Gouthami ManivasagamFor Respondent: Shri R. Vijayaraghavan, Advocate
Section 115JSection 143(3)Section 14ASection 40A(7)Section 40A(7)(b)Section 40A(9)Section 43B

High Court in the case of Madras Refineries Ltd., supra cannot be applied blindly without discussing about the applicability of Explanation (2) to Section 37(1) of the Act inserted by Finance Act-2, 2014 w.e.f.01.04.2015. Since there was no discussion in the impugned order by the CIT(A) whether

Aditya Birla Sun Life Amc Limited, Maharashtra vs. The Deputy Commissioner of Income Tax- Circle 6(1)(1), Maharashtra

ITA 6703/MUM/2025[2023-24]Status: DisposedITAT Mumbai06 Feb 2026AY 2023-24

Bench: Shri Amit Shukla & Shri Makarand Vasant Mahadeokar1. Ita No. 6663/Mum/2025 (Assessment Year: 2017-18) 2. Ita No. 6701/Mum/2025 (Assessment Year: 2018-19) 3. Ita No. 6702/Mum/2025 (Assessment Year: 2022-23) & 4. Ita No. 6703/Mum/2025 (Assessment Year: 2023-24) Aditya Birla Sun Life Dcitcircle-6(1)(1), Amc Limited, Room No. 502, 5Th 17Th Floor, One World Vs. Floor, Aayakar Centre Tower-1, Jupiter Bhavan, M. K. Mill Compount, 841, Road, Churchgate, Senapati Bapat Marg, Mumbai-400 020 Delisle Road, S.O. Mumbai-400 013 Pan/Gir No. Aaacb6134D (Applicant) (Respondent) Assessee By Shri Ronak Doshi, Shri Shrey Agrawal & Shri Aadish Jain, Ld. Ars Revenue By Shri Surendra Mohan, Ld. Dr Date Of Hearing 27.01.2026 Date Of Pronouncement 06.02.2026

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 144BSection 250Section 270ASection 36(1)(va)Section 40Section 43B

section 80G would result in double deduction of CSR expenditure. The explanation of the assessee that CSR expenditure had already been disallowed under section 37(1) and that the claim under section 80G was restricted only to eligible donations was not accepted. Relying on Explanation 2 to section 37(1 ... Before the ld. CIT(A), the assessee reiterated that there was no double deduction, as the CSR expenditure was not claimed under section 37(1) and the claim under section 80G was confined to donations made to institutions approved under section 80G. The ld. CIT(A), however, upheld the action

Aditya Birla Sun Life Amc Limited, Maharashtra vs. The Deputy Commissioner of Income Tax-Circle 6(1)(1), Maharashtra

ITA 6702/MUM/2025[2022-23]Status: DisposedITAT Mumbai06 Feb 2026AY 2022-23
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 144BSection 250Section 270ASection 36(1)(va)Section 40Section 43B

section 80G would result in double deduction of CSR expenditure. The explanation of the assessee that CSR expenditure had already been disallowed under section 37(1) and that the claim under section 80G was restricted only to eligible donations was not accepted. Relying on Explanation 2 to section 37(1 ... Before the ld. CIT(A), the assessee reiterated that there was no double deduction, as the CSR expenditure was not claimed under section 37(1) and the claim under section 80G was confined to donations made to institutions approved under section 80G. The ld. CIT(A), however, upheld the action

Aditya Birla Sun Life Amc Limited, Maharashtra vs. The Deputy Commissioner of Income Tax- Circle 6 (1)(1), Maharashtra

Accordingly, this ground is allowed

ITA 6701/MUM/2025[2018-19]Status: DisposedITAT Mumbai06 Feb 2026AY 2018-19
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 144BSection 250Section 270ASection 36(1)(va)Section 40Section 43B

section 80G would result in double deduction of CSR expenditure. The explanation of the assessee that CSR expenditure had already been disallowed under section 37(1) and that the claim under section 80G was restricted only to eligible donations was not accepted. Relying on Explanation 2 to section 37(1 ... Before the ld. CIT(A), the assessee reiterated that there was no double deduction, as the CSR expenditure was not claimed under section 37(1) and the claim under section 80G was confined to donations made to institutions approved under section 80G. The ld. CIT(A), however, upheld the action

Aditya Birla Sun Life Amc Limited, Maharashtra vs. The Deputy Commissioner of Income Tax Circle 6(1)(1), Maharashtra

Accordingly, this ground is allowed

ITA 6663/MUM/2025[2017-18]Status: DisposedITAT Mumbai06 Feb 2026AY 2017-18
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 144BSection 250Section 270ASection 36(1)(va)Section 40Section 43B

section 80G would result in double deduction of CSR expenditure. The explanation of the assessee that CSR expenditure had already been disallowed under section 37(1) and that the claim under section 80G was restricted only to eligible donations was not accepted. Relying on Explanation 2 to section 37(1 ... Before the ld. CIT(A), the assessee reiterated that there was no double deduction, as the CSR expenditure was not claimed under section 37(1) and the claim under section 80G was confined to donations made to institutions approved under section 80G. The ld. CIT(A), however, upheld the action

Giraffe Developers Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Central Circle-2(4), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 5303/MUM/2025[2013-14]Status: DisposedITAT Mumbai06 Feb 2026AY 2013-14

Bench: Shri Saktijit Dey & Shri Jagadish

Section 143(1)Section 143(2)Section 143(3)Section 253(5)Section 37(1)

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER

Maharashtra State Electricity Transmission Company Limited, Mumbai vs. ITO Circle 14(1)(1), Mumbai

ITA 2552/MUM/2025[2016-17]Status: DisposedITAT Mumbai06 Feb 2026AY 2016-17

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Madhao VichoreFor Respondent: Shri Solgy Jose
Section 143(3)Section 14A

concluded that since the expenditure pertained to earlier years, deduction for the same could not be allowed to the Assessee in terms of Section 37(1) of the Act. The Assessing Officer noted that similar disallowance was made in the Assessee’s own case in earlier years. Therefore, made disallowance

JCIT(OSD)-14(1)(1), Mumbai vs. Maharashtra State Electricity Transmission Co. Ltd., Mumbai

ITA 2093/MUM/2025[2016-17]Status: DisposedITAT Mumbai06 Feb 2026AY 2016-17

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Madhao VichoreFor Respondent: Shri Solgy Jose
Section 143(3)Section 14A

concluded that since the expenditure pertained to earlier years, deduction for the same could not be allowed to the Assessee in terms of Section 37(1) of the Act. The Assessing Officer noted that similar disallowance was made in the Assessee’s own case in earlier years. Therefore, made disallowance

ACIT, New Delhi vs. Arjun Enterprises Private Limited, Mumbai

In the result, ground No.5 & 6 raised by the revenue are dismissed

ITA 4257/DEL/2025[2018-19]Status: DisposedITAT Delhi06 Feb 2026AY 2018-19

Bench: Satbeer Singh Godara & Shri S. Rifaur Rahmanacit , Vs. Arjun Enterprises Pvt. Ltd. New Delhi 711, Filix Commercial Complex, Opp Asian Paints L.Bs Marg Bhandup W Mumbai 400078 Maharashtra (Pan: Aahca 1448 A)

For Appellant: NoneFor Respondent: Sh. Jitender Singh, CIT DR
Section 133(6)Section 143(2)Section 40Section 68

above, the appellant's claim for Limit Closing Charges amounting to Rs. 59,62,500/- as an allowable business expense under Section 37(1) of the I.T. Act, 1961 is found correct” 12. With regard to non-deduction of TDS on interest on total TDS remittance, Ld. CIT(A) observed

Deputy Commissioner of Income Tax Circle 2 1 1 Ahmedabad, Ahmedabad vs. Gujarat Mineral Development Co Rporation Limited, Ahmedabad

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

ITA 2523/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad05 Feb 2026AY 2017-18

Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

Section 115JSection 143(3)Section 14ASection 37Section 37(1)

expenses u/s. 37(1) of the Act. The assessee sought deduction of Rs.62,91,01,252/- on account of Mine Closure Expense under Section 37(1) of the Act. This claim represents the net amount derived from the provision made during the year (Rs.65,05,59,333/) after reducing ... expenditure of Rs.62,91,01,252/- u/s 37(1) of the Act being Mine Closure Expenses without appreciating the fact that allowability under Section 37(1) requires that expenditure must be actually incurred or liability must have accrued. Mere accounting adjustment in the form of provision without corresponding expenditure cannot

Nomura Capital (India) Private Limited, Mumbai vs. Deputy Commissioner of Income Tax Circle 7(1)(1), Mumbai

In the result, grounds raised by the assessee are allowed

ITA 2851/MUM/2025[2012-13]Status: DisposedITAT Mumbai05 Feb 2026AY 2012-13

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

For Appellant: Shri Madhur Agarwal, AdvocateFor Respondent: Shri Leyaqat Ali Aafaqui, Sr. DR
Section 143(3)Section 145

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT

Amrutanjan Healthcare Ltd, Mylapore vs. DCIT Corp Circle 1(1), Nungambakkam

In the result, the Ground Nos

ITA 3851/CHNY/2025[2021-22]Status: DisposedITAT Chennai03 Feb 2026AY 2021-22

Bench: Shri George George K & Shri Inturi Rama Raoआयकर अपील सं./Ita No.: 3851/Chny/2025 िनधा"रण वष"/Assessment Year: 2021-22 & S.A. No. 136/Chny/2025 [In Ita No. 3851/Chny/2025] Amrutanjan Healthcare Ltd., The Deputy Commissioner 103, Luz Church Road, Vs. Of Income Tax, Chennai – 600 004. Corporate Circle 1(1), Chennai. Pan: Aaaca 3164C (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri V. Swaminathan, Fca ""यथ" क" ओर से/Respondent By : Ms. Gouthami Manivasagam, Addl.Cit सुनवाई क" तारीख/Date Of Hearing : 03.02.2026 घोषणा क" तारीख/Date Of Pronouncement : 03.02.2026

For Appellant: Shri V. Swaminathan, FCAFor Respondent: Ms. Gouthami Manivasagam
Section 133(6)Section 143(2)Section 143(3)Section 194JSection 250Section 37

assessee’s books of account were not rejected, SLP filed against said order was to be dismissed. The Apex Court has held that “Section 37(1) of the Income-tax Act, 1961 Business expenditure – Allowability of (Onus to prove) – In course of assessment, assessee claimed deduction of expenses towards bricks

Technocraft Industries (India) Limited, Mumbai vs. Asst. CIT. 11(3)(1), Mumbai

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

ITA 7423/MUM/2025[2012-13]Status: DisposedITAT Mumbai03 Feb 2026AY 2012-13

Bench: Shri Anikesh Banerjee & Shri Makarand Vasant Mahadeokar

For Appellant: Shri Tarang Mehta, Adv. a/w Shri Akash GogariCAFor Respondent: Shri Ritesh Misra (CIT DR)
Section 143(3)Section 148Section 250Section 37

amount paid to M/s Shanti SevaNidhi of Rs.50 lakhs u/s 37(1) of the Income Tax Act, 1961. As per the Ld. AR, section 37(1) of the Income Tax Act, 1961 is a residuary section. Hence this section covers only those items of businessexpenditure which are not covered under ... reopening under section 148 of the Act and on merits regarding the disallowance of CSR expenditure of Rs.2.50 crore claimed under section 37(1) of the Act. On merits, it is an admitted fact that the assessee paid the said amount to SSN, which is engaged in imparting technical