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“Section 36(1)(vii)”

Section References (mined)Section 36Section 36(1)(vii)853 judgments

The decision most relied on for Section 36(1)(vii) is TRF Ltd. v. CIT (323 ITR 397), cited in 714 judgments on BharatTax.

Leading authorities on Section 36(1)(vii)

TRF Ltd. v. CIT
323 ITR 397 · 2010 · Supreme Court
714
citing judgments

For claiming deduction for bad debts under section 36(1)(vii) of the Income Tax Act, it is sufficient for the assessee to write off the debt as irrecoverable in its accounts, and it is not necessary to prove that the debt has actually become irrecoverable.

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.

Vijaya Bank v. CIT
323 ITR 166 · 2010 · Supreme Court
392
citing judgments

A provision for bad and doubtful debts debited to the profit and loss account and reduced from advances on the balance sheet constitutes a write-off for deduction purposes. This is true even if individual debtor accounts are not closed.

Southern Technologies Ltd. v. JCIT
320 ITR 577 · 2010 · Supreme Court
353
citing judgments

The case concerns the allowability of deductions for provisions made under Section 36 of the Income Tax Act, 1961, especially those related to bad and doubtful debts. It distinguishes such deductions from the recognition of interest income on non-performing assets (NPAs).

Calcutta Co. Ltd. v. CIT
37 ITR 1 · 1959 · Supreme Court
341
citing judgments

When following the mercantile system of accounting, provisions for liabilities made on a scientific and rational basis are allowable as deductions, even if their actual quantification and discharge are deferred to a future date.

Catholic Syrian Bank Ltd. v. CIT
343 ITR 270 · 2012 · Supreme Court
326
citing judgments

For a bad debt deduction under Section 36(1)(vii), the debt must be actually written off as irrecoverable in the assessee's accounts, distinct from merely making a provision for bad and doubtful debts. The assessee bears the onus to satisfy the conditions under both Section 36(1)(vii) and Section 36(2) of the Income-tax Act.

United Commercial Bank v. CIT
240 ITR 355 · 1999 · Supreme Court
314
citing judgments

Liabilities accrued on a notional basis are allowable as deductions under the mercantile system of accounting even if their exact quantification or discharge is deferred to a future date or if the demand itself is disputed.

Judgments citing Section 36(1)(vii)

ACIT-19(3), Mumbai vs. Sheetal Jewelleryhouse LLP, Mumbai

In the result, appeal of the revenue bearing ITA No

ITA 8124/MUM/2025[2021-22]Status: DisposedITAT Mumbai12 Mar 2026AY 2021-22

Bench: Shri. Arun Khodpiaacit 19(3), Mumbai Sheetal Jewellery House Llp Room No. 513, 5Th Floor, Piramal Vs. 503/504, Brahans Business Park, Chamber, Parel Mumbai 400012 Off Mahakali, Caves Road, Andheri East, Mumbai 400093 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Acqfs9693D (Appellant) (Respondent) िनधा"रतीकीओरसे / Assessee By: Shri. Paresh Shaparia /Revenue By: Shri. Sanjeev Bhagat Sr. Ar Date Of Hearing 02.03.2026 Date Of Pronouncement 12.03.2026 आदेश/O R D E R Per Anikesh Banerjee [J.M]: Instant Appeal Of The Revenue Was Preferred Against The Order Of The National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As "Ld. Cit(A)"] Order Passed U/S. 250 Of The Income Tax Act, 1961 [Hereinafter Referred To As "Act"] Order Passed For The Assessment Year 2021-22 Date Of Order 25.09.2025. The Impugned Order Emanated From The Order Of The Assessment Unit Income Tax Department [Hereinafter Referred To As "Ld. Ao"], Order Passed U/S. 143(3) R.W.S. 144B Of The Act Date Of Order 26.12.2022. 2

For Appellant: Shri. Paresh ShapariaFor Respondent: Shri. Sanjeev Bhagat Sr. AR
Section 143(3)Section 194CSection 250Section 36

debts of Rs.3,61,20,866/- in books of accounts. With respect to the claim of bad debts, the amended provisions of section 36(1)(vii) are reproduced hereunder: “Section 36(1)(vii) Subject to the provisions of sub-section (2), the amount of any bad debt or part thereof ... include any provision for bad and doubtful debts made in the accounts of the assesse" On perusal of the amended provisions of section 36(1)(vii), it is observed that Bad Debts of a business are allowable as deduction u/s 36(1)(vii) r.w.s. 36(2) which inter alia provides

Iphonline Limited (Now As Asapp Info Global Servies Pvt Ltd), Mumbai vs. DCIT, Cir-6(1)(2), Mumbai

ITA 5946/MUM/2025[2011-12]Status: DisposedITAT Mumbai05 Mar 2026AY 2011-12

Bench: Shri Narender Kumar Choudhry & Shri Jagadish

Section 143(1)Section 250Section 36(1)(vii)Section 36(2)Section 36(2)(i)

evidently the criteria of which the Assessing Officer disallowed the writing off of Bad debts is not in harmony of the provisions of section 36(1)(vii) of the Act. However, at the same time, the Assessee has also not been able to prove that ... Court in the case of Catholic Syrien Bank Limited Vs. CIT (2012) 343 ITR 270, the Assessee must prove all the ingredients of section 36(1)(vii) and section 36(2). Proper documentation and adherence to conditions are essential for claiming Bad debt deduction. The Assessee neither before the Assessing

Progressive Constructions Limited, Hyderabad vs. DCIT., Circle-5(1), Hyderabad

In the result, appeal of the Assessee is allowed

ITA 625/HYD/2025[2021-2022]Status: DisposedITAT Hyderabad04 Mar 2026AY 2021-2022

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdiaआ.अपी.सं /Ita.No.625/Hyd/2025 Assessment Year 2021-2022 Progressive Constructions The Dcit, Limited, Hyderabad. Circle-5(1) Vs. Pin – 500 001. Telangana. Hyderabad - 500 004. Pan Aabcp2274M Telangana. (Appellant) (Respondent) Ca Pawan Kumar Chakrapani िनधा"रती "ारा/Assessee By : & Sri Santi Pavan Kumar, Advocate राज" व "ारा/Revenue By : Sri Lv Bhaskara Reddy, Cit-Dr सुनवाई की तारीख/Date Of Hearing: 02.02.2026 घोषणा की तारीख/Pronouncement: 04.03.2026 आदेश/Order Per Vijay Pal Rao:

For Appellant: And Sri Santi Pavan Kumar, AdvocateFor Respondent: Sri LV Bhaskara Reddy, CIT-DR
Section 143(3)Section 194CSection 263Section 36(1)(vii)

Revenue Central Board of Direct Taxes *** New Delhi, Dated 30th May, 2016 Subject: Admissibility of claim of deduction of Bad Debt under section 36(1) (vii) read with section 36(2) of the Income-Tax Act, 1961-reg. Proposals have been received by the Central Board of Direct Taxes regarding ... part of assessee to establish that the debt is irrecoverable. 2. Direct Tax Laws (Amendment) Act, 1987 amended the provisions of sections 36(1)(vii) and 36(2) of the Income Tax Act 1961, (hereafter referred to as the Act) to rationalize the provisions regarding allowability of bad debt with

Cordoba Engineering Private Limited, Kolkata vs. Income Tax Officer, Kolkata

In the result, the appeal of the assessee is allowed

ITA 2388/KOL/2025[2022-23]Status: DisposedITAT Kolkata26 Feb 2026AY 2022-23

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm Cordoba Engineering Private Income Tax Officer, Ward 1(1), Limited Aaykar Bhawan P-7, 23A, 7Th Floor, Room No.17, Chowringhee Square, Kolkata- Vs. Netaji Shubas Road, Kolkata- 700069, West Bengal 700001, West Bengal (Appellant) (Respondent) Pan No. Aabcc0348K Assessee By : Shri Manish Tiwari, Ar Revenue By : Shri Manoj Kumar Pati, Dr Date Of Hearing: 03.02.2026 Date Of Pronouncement: 26.02.2026

For Appellant: Shri Manish Tiwari, ARFor Respondent: Shri Manoj Kumar Pati, DR
Section 36(1)(vii)Section 36(2)

same to the income of the assessee by observing that expenditure is not allowable for the want of fulfilment of conditions as per Section 36(1)(vii) of the Act and 36(2) of the Act. 4. In the appellate proceedings, the ld. CIT (A) simply affirmed the order ... under:- “4. In view of the above, claim for any debt or part thereof in any previous year, shall be admissible under Section 36(1)(vii) of the Act, if it is written off as irrecoverable in the books of accounts of the assessee for that previous year

Truhome Finance Limited (Earlier Known As Shriram Housing Finance Limited), Chennai vs. Income Tax Officer Corporate Ward 3(1) Chennai, Chennai

ITA 781/CHNY/2025[2018-19]Status: DisposedITAT Chennai23 Feb 2026AY 2018-19
For Appellant: Mr. S.P. ChidambaramFor Respondent: Mr. Shiva Srinivas, CIT
Section 143(3)Section 144BSection 263Section 36Section 36(1)(viia)

आयकर अपीलीय अधिकरण, 'बी' न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH: CHENNΑΙ श्री मनु कुमार गिरि, न्यायिक

DCIT 2(3)(2), Mumbai vs. Icici Bank Ltd, Mumbai

ITA 1560/MUM/2016[2010-11]Status: DisposedITAT Mumbai20 Feb 2026AY 2010-11

Bench: Shri Arun Khodpia, Am &

Section 10(15)Section 143(3)Section 14ASection 92B(1)Section 92C

made by Id. AO, observing that the assessee was unable to substantiate the claim as per the provisions of section 36(1)(vii) r.w.s 36(2) by furnishing complete details. It was held that the assessee failed to justify the condition requisite for allowance of debt ... under section 36(1)(vii) of the Act. The Id. AO observed that the similar issue is sub judice for the previous year also. 14.2 The assessee carried the matter before the ld. CIT(A), who had taken cognizance of the decision in the case

Icici Bank Ltd, Mumbai vs. DCIT 2(3)(2), Mumbai

ITA 1446/MUM/2016[2010-11]Status: DisposedITAT Mumbai20 Feb 2026AY 2010-11

Bench: Shri Arun Khodpia, Am &

Section 10(15)Section 143(3)Section 14ASection 92B(1)Section 92C

made by Id. AO, observing that the assessee was unable to substantiate the claim as per the provisions of section 36(1)(vii) r.w.s 36(2) by furnishing complete details. It was held that the assessee failed to justify the condition requisite for allowance of debt ... under section 36(1)(vii) of the Act. The Id. AO observed that the similar issue is sub judice for the previous year also. 14.2 The assessee carried the matter before the ld. CIT(A), who had taken cognizance of the decision in the case

Alliance International Tours & Travels, Mumbai vs. DCIT, Circle 22(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 8085/MUM/2025[2018-19]Status: DisposedITAT Mumbai18 Feb 2026AY 2018-19

Bench: Shri Narender Kumar Choudhry & Shri Jagadishassessment Year: 2018-19

Section 143(3)Section 36(1)(vii)

small trade balances written off in the normal course of business. 4. The Assessing Officer disallowed the claim holding that the conditions of section 36(1)(vii) r.w.s. 36(2) were not satisfied and that certain amounts were in the nature of advances. The Ld. CIT(A) confirmed the disallowance ... from Aseel Tours & Travels and Rs.1,87,647/- being small trade balances, these represent business receivables written off. After the amendment to section 36(1)(vii), once the amount is written off in the books and arises from business, the deduction cannot be denied unless the revenue establishes that

Small Industries Development Bank of India, Mumbai vs. Circle 3(3)(1), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 2763/MUM/2025[2020-21]Status: DisposedITAT Mumbai17 Feb 2026AY 2020-21

Bench: Smt. Beena Pillai & Shri Girish Agrawalassessment Year: 2020-21

For Appellant: Shri Rakesh Joshi, CAFor Respondent: Shri Arun Kanti Datta, CIT DR
Section 143(3)Section 263

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH MUMBAI BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT

JCIT(OSD), Range-10, New Delhi, C.R. Building ITO vs. Rural Electrification Corporation Ltd., Kasturba Nagar

ITA 609/DEL/2025[2020-21]Status: DisposedITAT Delhi12 Feb 2026AY 2020-21

Bench: Shris.Rifaur Rahman & Shri Anubhav Sharmarec Limited, C/O D-22, Second Floor, South Extension 1, New Delhi – 110 049

For Appellant: Shri Ashwani Taneja, AdvocateFor Respondent: Ms. Pooja Swroop, CITDR
Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)

erred in granting relief to the assessee on the issue of the disallowance of Rs.5584,57,541/- under section 36(1)(vii) and section 36(1) (viia) (c) of the Act i.e., deductions under both section is independent on each other?" 4. Since the issue raised by the revenue

JCIT(OSD), Range-10, New Delhi, C.R. Building ITO vs. Rural Electrification Corporation Ltd., Kasturba Nagar

ITA 579/DEL/2025[2021-22]Status: DisposedITAT Delhi12 Feb 2026AY 2021-22

Bench: Shris.Rifaur Rahman & Shri Anubhav Sharmarec Limited, C/O D-22, Second Floor, South Extension 1, New Delhi – 110 049

For Appellant: Shri Ashwani Taneja, AdvocateFor Respondent: Ms. Pooja Swroop, CITDR
Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)

erred in granting relief to the assessee on the issue of the disallowance of Rs.5584,57,541/- under section 36(1)(vii) and section 36(1) (viia) (c) of the Act i.e., deductions under both section is independent on each other?" 4. Since the issue raised by the revenue

JCIT(OSD), Range-10, New Delhi, Cr Building ITO vs. Rural Electrification Corporation Ltd., Kasturba Nagar

ITA 578/DEL/2025[2019-20]Status: DisposedITAT Delhi12 Feb 2026AY 2019-20

Bench: Shris.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Ashwani Taneja, AdvocateFor Respondent: Ms. Pooja Swroop, CITDR
Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)

erred in granting relief to the assessee on the issue of the disallowance of Rs.5584,57,541/- under section 36(1)(vii) and section 36(1) (viia) (c) of the Act i.e., deductions under both section is independent on each other?" 4. Since the issue raised by the revenue

JCIT(OSD), Range-10, New Delhi, ITO C.R. Building vs. Rural Electrification Corporation Ltd., Kasturba Nagar

ITA 577/DEL/2025[2018-19]Status: DisposedITAT Delhi12 Feb 2026AY 2018-19

Bench: Shris.Rifaur Rahman & Shri Anubhav Sharmarec Limited, C/O D-22, Second Floor, South Extension 1, New Delhi – 110 049

For Appellant: Shri Ashwani Taneja, AdvocateFor Respondent: Ms. Pooja Swroop, CITDR
Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)

erred in granting relief to the assessee on the issue of the disallowance of Rs.5584,57,541/- under section 36(1)(vii) and section 36(1) (viia) (c) of the Act i.e., deductions under both section is independent on each other?" 4. Since the issue raised by the revenue

Rec Limited, New Delhi vs. ACIT-10 (OSD), Delhi, New Delhi

ITA 320/DEL/2025[2019-20]Status: DisposedITAT Delhi12 Feb 2026AY 2019-20

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmarec Limited, C/O D-22, Second Floor, South Extension 1, New Delhi – 110 049

For Appellant: Shri Ashwani Taneja, AdvocateFor Respondent: Ms. Pooja Swroop, CITDR
Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)

erred in granting relief to the assessee on the issue of the disallowance of Rs.5584,57,541/- under section 36(1)(vii) and section 36(1) (viia) (c) of the Act i.e., deductions under both section is independent on each other?" 4. Since the issue raised by the revenue

Rec Limited, New Delhi vs. ACIT-10 (OSD), Delhi, New Delhi

In the result, appeals filed by the revenue in the AY 2020-21 and AY

ITA 319/DEL/2025[2018-19]Status: DisposedITAT Delhi12 Feb 2026AY 2018-19

Bench: Shris.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Ashwani Taneja, AdvocateFor Respondent: Ms. Pooja Swroop, CITDR
Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)

erred in granting relief to the assessee on the issue of the disallowance of Rs.5584,57,541/- under section 36(1)(vii) and section 36(1) (viia) (c) of the Act i.e., deductions under both section is independent on each other ?” Since the issue raised by the revenue and assessee

Raiganj Central Co-Operative Bank Ltd., Raiganj, Uttar Dinajpur vs. D, C, I.T., Circle - 2, Jalpaiguri

In the result, the appeal filed by the Revenue in ITA No

ITA 975/KOL/2024[2013-2014]Status: DisposedITAT Kolkata11 Feb 2026AY 2013-2014

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115Section 143(3)Section 250Section 36(1)(viia)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT

Raiganj Central Co-Operative Bank Ltd., Raiganj, Uttar Dinajpur vs. D.C.I.T., Circle - 2, Jalpaiguri

ITA 974/KOL/2024[2012-2013]Status: DisposedITAT Kolkata11 Feb 2026AY 2012-2013

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115Section 143(3)Section 250Section 36(1)(via)Section 36(1)(viia)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT

Raiganj Central Co-Operative Bank Ltd., Raiganj, Uttar Dinajpur vs. JCIT (TDS), Range - 6, Siliguri

ITA 2237/KOL/2024[2013-2014]Status: DisposedITAT Kolkata11 Feb 2026AY 2013-2014

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115Section 143(3)Section 250Section 36(1)(via)Section 36(1)(viia)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT

India Infrastructure Finance Company Limited, Delhi vs. Assistant Commissioner of Income Tax, I.P. Estate, New Delhi

The appeal of the assessee is dismissed

ITA 5552/DEL/2024[2016-17]Status: DisposedITAT Delhi11 Feb 2026AY 2016-17

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 115JSection 143(3)Section 154Section 250Section 36(1)Section 36(1)(vii)

position of law is well settled. After 1.4.1989, for allowing deduction for the amount of any bad debt or part thereof under section 36(1) (vii) of the Act, it is not necessary of assessee to establish that the debt, in fact these become irrecoverable; it is enough ... 1)(vii) as this amount was not offered as income in the earlier years and such bad debts are covered by provisions of section 36(1)(vii) rws 36(2) of the Act according to which the same is allowable if the amount was considered in computing the income

The Dakshin Dinajpur District Central Cooperative Bank Ltd., Balurghat vs. ACIT, Circle 3(2), Malda

In the result, all the appeals of the assessee are allowed

ITA 2189/KOL/2025[2014-2015]Status: DisposedITAT Kolkata10 Feb 2026AY 2014-2015

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Dilip Chatterjee, ARFor Respondent: Ms. Archana Gupta, DR
Section 36(1)(viia)

aggregated advances made by the rural branches of such bank computed in the prescribed manner. We have also perused the provisions of Section 36(1)(vii) of the Act, which provides for allowing the amount of any bad debt or a part thereof which is written off as irrecoverable ... account of the assessee. We observe that both these deductions are independent of each other. We note that Section 36(1)(vii) of the Act deals with the writing off bad debts whereas the section 36(1)(viia) deals with creation of provisions for bad and doubtful debts based upon