Section 36(1)(ii) of the Income Tax Act

The decision most relied on for Section 36(1)(ii) is Loyal Motor Service Co. Ltd. v. CIT (14 ITR 647), cited in 48 of the 39 judgments on BharatTax that turn on this section.

Leading authorities on Section 36(1)(ii)

Loyal Motor Service Co. Ltd. v. CIT
14 ITR 647 · 1946 · High Court
48
citing judgments

A payment of bonus or commission is allowable as a business deduction under Section 36(1)(ii) unless it constitutes a distribution of profits or dividends, thereby distinguishing payments genuinely for services from those merely intended to escape taxation.

AMD Metplast (P) Ltd. v. DCIT
341 ITR 563 · 2012 · High Court
35
citing judgments

Bonus or commission paid to directors for services rendered as part of their terms of employment is allowable as a deduction, and Section 36(1)(ii) of the Income Tax Act does not apply in such cases.

AMD Metplast (P.) Ltd. v. Dy. CIT
20 Taxmann.com 647 · 2012 · High Court
10
citing judgments
Dalal Barocha Stock Broking (P) Ltd. v. Addl. CIT, Range-4(1), Mumbai
11 Taxmann.com 426 · 2011 · Reported
7
citing judgments
Dalal Broacha Stock Broking Pvt. Ltd. v. Addl.CIT
10 ITR (Trib) 357 · 2011 · ITAT
5
citing judgments
Coil Company (P.) Ltd. v. Asst. CIT
8 Taxmann.com 225 · 2010 · ITAT
3
citing judgments

Judgments on Section 36(1)(ii)

DCIT, CENTRAL -4(3), KOLKATA, KOLKATA vs. RAJESH AUTO MERCHANDISE PRIVATE LIMITED, KOLKATA

ITA 2610/KOL/2025[2021-22]Status: DisposedITAT Kolkata26 Feb 2026AY 2021-22

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

V. M. SALGAOCAR AND BROTHER PRIVATE LIMITED,VASCO vs. ASSISTANT DIRECTOR OF INCOME TAX, CPC, BENGALURU

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

ITA 83/PAN/2024[2021-22]Status: DisposedITAT Panaji12 Feb 2026AY 2021-22

Bench: Shri Pavan Kumar Gadale & Shri G D Padmahshalii T A. No.83/Pan/2024 (A.Y.2021-22 ) V M Salgaocar & Brother Vs Cpc, Private Limited, Bengaluru-560500. . P.B.No.14, Salgaocar House, Karnataka Dr.F.L.Gomes Road, Vasco De Gama, Goa-403802, Pan .No.Aaacv5950B (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent)

BAJAJ CONSULTANTS PRIVATE LIMITED,MUMBAI vs. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 4(1), MUMBAI

In the result the appeal of the assessee is dismissed

ITA 2676/MUM/2025[2017-18]Status: DisposedITAT Mumbai09 Feb 2026AY 2017-18

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2017-18

For Appellant: Ms. Srushti ChawdaFor Respondent: 17/12/2025
Section 14A

DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1), BENGALURU, BENGALURU vs. NUTRICRAFT INDIA PRIVATE LIMITED, BENGALURU

In the result appeal filed by the learned assessing officer is partly allowed for statistical purposes

ITA 298/BANG/2024[2017-18]Status: DisposedITAT Bangalore16 Dec 2025AY 2017-18

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year : 2017-18

For Appellant: Shri Muthu Shankar, CIT(DR)(ITAT), BengaluruFor Respondent: Smt. Suman Lunkar, CA
Section 143(3)Section 148ASection 153CSection 194C(6)Section 194C(7)Section 36(1)(ii)Section 40

THE CHODAVARAM CO OPERATIVE SUGARS LIMITED,VISAKHAPATNAM vs. DCIT/ACIT, CIRCLE-3(1), VISAKHAPATNAM

In the result, appeal filed by the assessee is allowed

ITA 543/VIZ/2025[2018-19]Status: DisposedITAT Visakhapatnam05 Dec 2025AY 2018-19

Bench: the Ld.AO. The Ld.AO after perusing the details furnished by the assessee observed that the assessee has paid bonus amount of Rs.1,27,03,496/- during the F.Y.2017-18 on various dates from April 2017 to September 2017. The Ld.AO observed that generally, bonus is declared during Diwali season and paid accordingly and therefore, concluded that the bonus amount of Rs.1,27,03,490 does not pertain to the impugned assessment year and therefore disallowed the same.

Section 142(1)Section 143Section 143(3)Section 250Section 69C

RADHANAGAR COLD STORES PRIVATE LIMITED,KOLKATA vs. ITO, WARD 9(3), , KOLKATA

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

ITA 777/KOL/2025[2018-2019]Status: DisposedITAT Kolkata20 Nov 2025AY 2018-2019

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) I.T.A. No. 777/Kol/2025 Assessment Year: 2018-2019 Radhanagar Cold Stores Pvt. Limited,...……Appellant 161, Rajakatra Building, 1St Floor, Netaji Subha Road, Burrabazar, Kolkata-700007 [Pan:Aabcr5647N] -Vs.- Income Tax Officer,…………………………..…..Respondent Ward-9(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Shri Palash Chttopadhyay, Fca, Appeared On Behalf Of The Assessee Shri Susanta Saha, Sr. D.R., Addl. Cit, Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: September 04, 2025 Date Of Pronouncing The Order: November 20, 2025 O R D E R

Section 142(1)Section 36(1)(ii)

DCIT, CENTRAL CIRCLE - 4(4), KOLKATA, KOLKATA vs. LADHURAM TOSHNIWAL AND SONS ELECTRICALS PRIVATE LIMITED , KOLKATA

In the result, allthe appeals of the Revenue are dismissed

ITA 1660/KOL/2025[2019-20]Status: DisposedITAT Kolkata11 Nov 2025AY 2019-20

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

For Appellant: Shri Manish Tiwari, ARFor Respondent: Shri Kapil Mandal, DR
Section 132Section 133(6)Section 148Section 68

DCIT, CENTRAL CIRCLE - 4(4), KOLKATA, KOLKATA vs. LADHURAM TOSHNIWAL AND SONS ELECTRICALS PRIVATE LIMITED , KOLKATA

In the result, allthe appeals of the Revenue are dismissed

ITA 1659/KOL/2025[2018-19]Status: DisposedITAT Kolkata11 Nov 2025AY 2018-19

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

For Appellant: Shri Manish Tiwari, ARFor Respondent: Shri Kapil Mandal, DR
Section 132Section 133(6)Section 148Section 68

DCIT, CENTRAL CIRCLE - 4(4), KOLKATA, KOLKATA vs. LADHURAM TOSHNIWAL AND SONS ELECTRICALS PRIVATE LIMITED , KOLKATA

In the result, allthe appeals of the Revenue are dismissed

ITA 1657/KOL/2025[2016-17]Status: DisposedITAT Kolkata11 Nov 2025AY 2016-17

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

For Appellant: Shri Manish Tiwari, ARFor Respondent: Shri Kapil Mandal, DR
Section 132Section 133(6)Section 148Section 68

ASSAM GAS COMPANY LIMITED,DULIAJAN vs. DCIT/ ACIT, CIRCLE 1/DBR, DIBRUGARH

Appeal is allowed for statistical purposes

ITA 66/GTY/2025[2019-20]Status: DisposedITAT Guwahati16 Oct 2025AY 2019-20

Bench: SHRI MANOMOHAN DAS, JUDICIAL MEMBER SHRI SANJAY AWASTHI (Accountant Member)

Section 139(1)Section 139(5)Section 143(1)Section 250Section 438Section 43B

SHARADA ELECTORS PRIVATE LIMITED,PUNE vs. PCIT, PUNE-3, PUNE

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

ITA 1432/PUN/2025[2020-21]Status: DisposedITAT Pune22 Sept 2025AY 2020-21

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Kishor B. PhadkeFor Respondent: Shri Amit Bobde
Section 142(1)Section 143(1)Section 143(2)Section 14ASection 263

DCIT, CC-7(2), MUMBAI vs. M/S. PATANJALI FOODS LTD.,( FORMERLY KNOWN AS RUCHI SOYA INDUSTRIES LTD,, MUMBAI

In the result the appeal filed by the revenue stands dismissed

ITA 1174/MUM/2023[2011-12]Status: DisposedITAT Mumbai17 Sept 2025AY 2011-12

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

Section 132Section 143(3)Section 153ASection 250Section 37(1)

DCIT, CC-7(2), MUMBAI vs. M/S. PATANJALI FOODS LTD.,( FORMERLY KNOWN AS RUCHI SOYA INDUSTRIES LTD,, MUMBAI

In the result the appeal filed by the revenue stands dismissed

ITA 1173/MUM/2023[2011-12]Status: DisposedITAT Mumbai17 Sept 2025AY 2011-12

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

Section 132Section 143(3)Section 153ASection 250Section 37(1)

M/S RAM SUKH CHUNNI LAL,JAIPUR vs. ITO, WARD-1(3), JAIPUR, JAIPUR

In the result, the appeal of the assessee is allowed with above directions

ITA 782/JPR/2025[2018-19]Status: DisposedITAT Jaipur15 Sept 2025AY 2018-19

Bench: Dr. S. Seethalakshmi & Shri Gagan Goyalram Sukh Chunni Lal, A-5, New Grain Mandi, Outside Chandpole, Jaipur 302 001 Pan No. Aabfr 5271M ...... Appellant Vs.

For Appellant: Mr. P. C. Parwal, CA, Ld. ARFor Respondent: Mrs. Alka Gautam, CIT, Ld. DR
Section 250Section 43BSection 68

PREM CHAND SINGH,CHATRA vs. PR.CIT, DHANBAD

The appeal of the assessee is allowed for statistical purposes

ITA 351/RAN/2024[2017-18]Status: DisposedITAT Ranchi11 Sept 2025AY 2017-18

Bench: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahayi.T.A. No.107/Ran/2024 Assessment Year: 2018-19 Pravin Engineering Pvt. Ltd.......................…...........................……….……Appellant Plot No.6A, Phase-1, Industrial Area, Adityapur, Jharkhand - 832109. [Pan: Aabcp0358E] Vs. Acit, National E-Assessment Centre, New Delhi.……........……...…..…..Respondent Appearances By: None Appeared On Behalf Of The Appellant. Shri Khubchand T. Pandya, Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : September 10, 2025 Date Of Pronouncing The Order : September 11, 2025 Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Assessee Against An Order Dated 28.02.2024 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. Brief Facts Of The Case Are That The Assessee Is A Company & Filed Its Return Of Income For The Assessment Year 2018-19 Declaring Total Income Of Rs.73,21,980/-. The Case Of The Was Selected For Scrutiny & The Assessing Officer Completed The Assessment U/S 143(3) Of The Act Assessing Total Income Of The Assessee At Rs.84,67,210/-. During The Assessment Proceedings, The Assessing Officer Pointed Out That The Tax Audit Report Has Identified That The Assessee Paid Its Directors A Sum Of Rs.11,36,000/- As Bonus Or Commission Which Was Otherwise Payable As Profits Or Dividend & This Amount Was Covered By Section 36(1)(Ii) Of The Act. The Assessing Officer Disallowed The Claim Of Commission As Claimed By The Assessee.

Section 143(3)Section 250Section 36(1)(ii)

PRAVIN ENGINEERING PRIVATE LIMITED,JAMSHEDPUR vs. ACIT , NATIONAL E-ASSESSMENT CENTRE

The appeal of the assessee is allowed for statistical purposes

ITA 107/RAN/2024[2018-2019]Status: DisposedITAT Ranchi11 Sept 2025AY 2018-2019

Bench: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahayi.T.A. No.107/Ran/2024 Assessment Year: 2018-19 Pravin Engineering Pvt. Ltd.......................…...........................……….……Appellant Plot No.6A, Phase-1, Industrial Area, Adityapur, Jharkhand - 832109. [Pan: Aabcp0358E] Vs. Acit, National E-Assessment Centre, New Delhi.……........……...…..…..Respondent Appearances By: None Appeared On Behalf Of The Appellant. Shri Khubchand T. Pandya, Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : September 10, 2025 Date Of Pronouncing The Order : September 11, 2025 Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Assessee Against An Order Dated 28.02.2024 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. Brief Facts Of The Case Are That The Assessee Is A Company & Filed Its Return Of Income For The Assessment Year 2018-19 Declaring Total Income Of Rs.73,21,980/-. The Case Of The Was Selected For Scrutiny & The Assessing Officer Completed The Assessment U/S 143(3) Of The Act Assessing Total Income Of The Assessee At Rs.84,67,210/-. During The Assessment Proceedings, The Assessing Officer Pointed Out That The Tax Audit Report Has Identified That The Assessee Paid Its Directors A Sum Of Rs.11,36,000/- As Bonus Or Commission Which Was Otherwise Payable As Profits Or Dividend & This Amount Was Covered By Section 36(1)(Ii) Of The Act. The Assessing Officer Disallowed The Claim Of Commission As Claimed By The Assessee.

Section 143(3)Section 250Section 36(1)(ii)

PONNUSAMY RAJA,VAKKIL NEW STREET, MADURAI vs. INCOME TAX OFFICER, NON-CORPORATE WARD 1(7), MADURAI, INCOME TAX OFFICE, CR BUILDING, MADURAI

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

ITA 1677/CHNY/2025[2018-2019]Status: DisposedITAT Chennai02 Sept 2025AY 2018-2019

Bench: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunathaआयकर अपील सं./I.T.A. No.1677/Chny/2025 िनधा"रण वष"/Assessment Year: 2018-19 Ponnusamy Raja, Vs. The Income Tax Officer, No. 176-A, 3Rd Floor, Vakkil New Street, Non Corporate Ward 1(7), Simmakal, Madurai 625 001. Madurai. [Pan:Agepr6307F] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri T. Vasudevan, Advocate ""थ" की ओर से/Respondent By : Shri N. Rajakumar, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 26.08.2025 घोषणा की तारीख /Date Of Pronouncement : 02.09.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Assessee Is Directed Against The Order Dated 04.03.2025 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Year 2018-19. 2. We Find That This Appeal Is Filed With A Delay Of 9 Days. The Assessee Filed An Affidavit For Condonation Of Delay Stating The Reasons. Upon Hearing Both The Parties & On Examination Of The Said Affidavit, We Find The Reasons Stated By The Assessee Are Bonafide, Which Really

For Appellant: Shri T. Vasudevan, AdvocateFor Respondent: Shri N. Rajakumar, Addl. CIT
Section 36(1)(ii)Section 44A

INCOME TAX OFFICER, DELHI vs. RAKHEE WALECH, DELHI

In the result, Appeal of the Revenue is partly allowed for

ITA 5987/DEL/2024[2017-18]Status: DisposedITAT Delhi29 Jul 2025AY 2017-18

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwali.T.A. No. 5987/Del//Del/2024 (A.Y 2017-18) Income Tax Officer Vs Rakhee Walecha, Room No. 1210, E-2, Block, Civic 455, Mandakini Enclave, Centre, New Delhi Alaknanda, New Delhi Pan: Aaipw4418J Appellant Respondent Assessee By Sh. Anuj Tiwari, Ca Revenue By Sh. Ajay Kumar Arora, Sr. Dr Date Of Hearing 16/07/2025 Date Of Pronouncement 29/07/2025

Section 36(1)(ii)Section 68

CORONA STEEL INDUSTRY PVT. LTD.,KOLKATA vs. DCIT, CENTRAL CIRCLE 3(3), KOLKATA

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

ITA 2531/KOL/2024[2021-2022]Status: DisposedITAT Kolkata22 Jul 2025AY 2021-2022

Bench: SHRI DUVVURU RL REDDY (Vice President)

For Appellant: Shri Arvind Agrawal, ARFor Respondent: Shri susanta Saha, Addl. CIT-Sr.DR
Section 143(1)Section 154Section 36(1)(ii)

MORNI SAREES PRIVATE LIMITED,INDORE vs. ASST. DIRECTOR OF INCOME TAX, CPC, BENGALURU

In the result, the order of the CIT(A) is set aside, and the appeal of the assessee is partly allowed”

ITA 910/IND/2024[2021-22]Status: DisposedITAT Indore07 Jul 2025AY 2021-22

Bench: Shri B.M. Biyani & Shri Paresh M Joshi

Section 143(1)Section 154Section 246ASection 250Section 253Section 36Section 43B

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