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

Income-tax Act, 2025: ss.29, 30, 31, 32

Section 36(1)(iv) falls under section 36 of the Income-tax Act, 1961, which corresponds to section 29 (Deductions related to employee welfare), section 30 (Deduction on certain premium), section 31 (Deduction for bad debt and provision for bad and doubtful debt) and section 32 (Other deductions) of the Income-tax Act, 2025.

Read section 29 of the 2025 ActRead section 30 of the 2025 ActRead section 31 of the 2025 ActRead section 32 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 36(1)(iv) is CIT v. Rao Bahadur Calavala Cunnan Chetty Charities (135 ITR 485), cited in 98 of the 116 judgments on BharatTax that turn on this section.

Leading authorities on Section 36(1)(iv)

CIT v. Rao Bahadur Calavala Cunnan Chetty Charities
135 ITR 485 · 1982 · High Court
98
citing judgments

The income of a charitable trust, particularly income from property held under trust, for the purpose of claiming exemption under Section 11, must be computed in a normal commercial manner, without strict reference to the computation provisions for different heads of income like Section 14 or Section 24(a). This approach ensures that the income available for application or accumulation is assessed on commercial principles.

Melmould Corporation v. CIT
202 ITR 789 · 1993 · High Court
46
citing judgments

Adjustments to opening stock are not permissible when applying Section 145A, as this would retroactively disturb finalized profit figures of earlier assessment years. MODVAT credit balance in closing stock should be added to income, but corresponding adjustments to opening stock are not allowed.

CIT v. Mazagaon Dock Ltd.
191 ITR 460 · 1991 · High Court
40
citing judgments

A wet dock of a dockyard is considered 'plant' for the purpose of depreciation.

R Dalmia v. CIT
236 ITR 480 · 1999 · Supreme Court
38
citing judgments

When a return is filed under section 148, the assessment and reassessment under section 147 must follow the procedural provisions subsequent to section 139 of the Income Tax Act.

33 ITR 182 (SC). (ii) Investment Ltd. v. CIT
167 Taxmann 256 · 2008 · High Court
33
citing judgments
CIT v. Sirpur Paper Mills
237 ITR 41 · 1999 · Supreme Court
24
citing judgments

The amplitude of a deduction permitted by a section cannot be cut down by imposing conditions that rewrite the section.

77 ITR 533 (SC) (iii) MKB Asia (P.) Ltd. v. CIT
101 ITR 40 · 1975 · High Court
22
citing judgments

The Assessing Officer has the discretion to select an accounting method and the assessee cannot compel the department to adopt a particular method.

CIT-1, Lucknow v. U.P. Rajya Vidyut Utpadan Nigam Ltd.
37 Taxmann.com 164 · 2013 · High Court
22
citing judgments

The provision of Section 43B of the Income Tax Act, 1961, is not applicable to interest payable on loans obtained from the Government of India. Consequently, disallowance under Section 43B for non-payment of such interest is not permissible.

Commissioner of Income Tax v. Western India Paper and Paperboard Private Limited
189 ITR 309 · 1991 · High Court
21
citing judgments

Expenditure not allowable under Section 36(1)(iv) of the Income Tax Act may still be allowable under Section 37 of the Act, even if the Tribunal followed this decision.

167 Taxman 256 (Gau.) 35 (iv) JuggilalKamlaat Bankers v. CIT
75 Taxmann 335 · 1994 · High Court
21
citing judgments

Judgments on Section 36(1)(iv)

Pr. Commissioner of Income Tax-6, New Delhi vs. Network Programme India Ltd

ITA/862/2018HC Delhi25 Jul 2023

Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA

Section 36(1)(iv)Section 43B

Advanced Bolting Solutions Private Limited, Mumbai vs. Commissioner of Income Tax (Appeals), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 989/MUM/2023[2019-2020]Status: DisposedITAT Mumbai24 Jul 2023AY 2019-2020

Bench: Shri Amarjit Singh & Ms. Kavitha Rajagopalita Nos.988 & 989/Mum/2023 (A.Ys. 2019-20 To 2020-21)

For Appellant: Anuj KisnadwalaFor Respondent: Ratnakar Shelake
Section 143(1)Section 2Section 2(24)Section 250Section 36

Advanced Bolting Solutions Private Limited, Mumbai vs. Commissioner of Income Tax(Appeas), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 988/MUM/2023[2020-2021]Status: DisposedITAT Mumbai24 Jul 2023AY 2020-2021

Bench: Shri Amarjit Singh & Ms. Kavitha Rajagopalita Nos.988 & 989/Mum/2023 (A.Ys. 2019-20 To 2020-21)

For Appellant: Anuj KisnadwalaFor Respondent: Ratnakar Shelake
Section 143(1)Section 2Section 2(24)Section 250Section 36

Shri Arun Kumar Shrivastava, Indore vs. Asstt, Director of Income Tax, Indore

ITA 98/IND/2022[2018-19]Status: DisposedITAT Indore13 Mar 2023AY 2018-19

Bench: Ms. Suchitra Kamble & Shri B.M. Biyani(Conducted Through Virtual Court) Shri Arun Kumar Adit, Cpc, Shrivastava, Bangalore 9, Shakti Nagar, Vs. Kanadia Road, Indore (Appellant / Assessee) (Respondent/ Revenue) Pan: Aopps 9595 H Assessee By Shri Soumya Bomb, Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 31.01.2023 Date Of Pronouncement 13.03.2023

Section 139(1)Section 143Section 143(1)Section 2(24)(ix)Section 2(24)(x)Section 36(1)(iv)Section 36(1)(va)Section 43B

M/S Shriram Chits Pvt Ltd Rep. by Ed, R. Duruvasan, Hyd vs. The Dy. Commr. of I.T., Hyderabad

ITTA/325/2006HC Telangana01 Feb 2023

Bench: N.TUKARAMJI,UJJAL BHUYAN

Section 2(24)(x)Section 260ASection 36(1)(iv)Section 36(1)(va)Section 43B

The Orgaon Urban Co-Operative Credit Society Limited, Marcela vs. Income Tax Officer, Ward - 2(3), Panaji

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

ITA 242/PAN/2019[2015-16]Status: DisposedITAT Panaji30 Nov 2022AY 2015-16

Bench: Shri Inturi Rama Raoआयकर अपील सं. / Ita No.242/Pan/2019 िनधा"रण वष" / Assessment Year : 2015-16 The Orgaon Urban Co- Vs. Ito, Ward-2(3), Panaji, Operative Credit Society Goa. Limited, Deulwada, Marcela, Goa- 403107. Pan : Aaaat6227D Appellant Respondent Assessee By : Shri Madhu Gawde Revenue By : Shri N. Shrikanth Date Of Hearing : 16.11.2022 Date Of Pronouncement : 30.11.2022 आदेश / Order Per Inturi Rama Rao, Am: This Is An Appeal Filed By The Assessee Directed Against The Order Of Ld. Commissioner Of Income Tax (Appeals)-1, Panaji [‘The Cit(A)’] Dated 29.05.2019 For The Assessment Year 2015-16. 2. The Appellant Raised The Following Grounds Of Appeal :- “1) The Learned Cit(A) Has Not Appreciated Appellants Submission That Though The Appellants Case Was Selected For Limited Scrutiny Under Cass Of Deduction Under Chapter Via & Low Income & High Loans / Advances / Investments The Learned Assessing Officer Erred In Examining Other Issues & Has Wrongly Travelled Beyond His Permitted Ambit In Making The Disallowances U/S. 40(A)(Ia) & Sec. 36(1)(V). 2) The Learned Cit(A) Ought To Have Considered That The Interest Earned On Statutory Investments Of Statutory Funds In The Apex Bank(Cooperative

For Appellant: Shri Madhu GawdeFor Respondent: Shri N. Shrikanth
Section 143(3)Section 194ASection 36Section 36(1)(iv)Section 36(1)(v)Section 36(1)(va)Section 40Section 80PSection 80P(2)(a)Section 80P(2)(d)

Principal Commissioner of Income Tax-1, Kolkata vs. Exide Industries Limited

ITA/95/2018HC Calcutta22 Sept 2022

Bench: : The Hon’Ble Justice T.S. Sivagnanam A N D The Hon’Ble Justice Supratim Bhattacharya Date : 22Nd September, 2022. Appearance: Mr. Tilak Mitra, Adv. ...For The Appellant Mr. J.P. Khaitan, Sr. Adv. Mrs. Nilanjana Banerjee Pal, Adv. …For The Respondent The Court:- This Appeal Filed By The Revenue Under Section 260A Of The Income Tax Act, 1961 (‘The Act’ For Brevity) Is Directed Against The Order Dated June 15, 2016 Passed By The Income Tax Appellate Tribunal, “C” Bench, Kolkata (In Short The ‘Tribunal’) In M.A. No. 38/Kol/2016 Arising Out Of I.T.A. No. 1414/Kol/2007 For The Assessment Year 2004-2005. The Appeal Was Admitted To Decide The Following Substantial Question Of Law:- “……………..….The Legal Issue That Arises Is Since The Initial Contribution Is Permitted To Be Deducted From The Income & Annual Contribution To A Pension Fund May Also Be Deducted From The Income Of The Employer, Would An Ad Hoc Or Lump Sum Interim Contribution, In Such Circumstances, Be Also Eligible For Deduction. ………………”

Section 260ASection 28Section 36Section 36(1)Section 36(1)(iv)

Span Intermediates Pvt. Ltd, Mumbai vs. ITO WD 2(3) (1), Mumbai

In the result, Ground No.3 of the assessee is allowed subject to submission of certified documents mentioned above

ITA 1917/MUM/2021[2018-19]Status: DisposedITAT Mumbai12 Sept 2022AY 2018-19

Bench: Shri Pavan Kumar Gadale & Shri Gagan Goyalspan Intermediates Pvt. Ltd. 6Th Floor, Jash Chambers, Mustafa Building, Sir Phiroz Shah Mehta Road, Mumbai-400001. Pan: Aabcs6103Q ...... Appellant Vs. Ito, Ward-2(3)(1) Aayakar Bhavan, M.K. Road, Mumbai-400020. ..... Respondent Appellant By : Sh. Sanjiv M. Shah Respondent By : Sh. Pramod Nikalje Date Of Hearing : 16/06/2022 Date Of Pronouncement : 12/09/2022 Order Per Gagan Goyal, A.M: This Appeal By The Assessee Is Directed Against The Order Of National Faceless Appeal Centre, Delhi [Hereinafter Referred To As [‘Nfac’] Dated 26.08.2021 Passed Under Section 250 Of The Income Tax Act, 1961 (Hereinafter Referred To As [‘The Act’] For The Assessment Year (Ay) 2018-19. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Sh. Sanjiv M. ShahFor Respondent: Sh. Pramod Nikalje
Section 139(1)Section 142(1)Section 143(2)Section 244ASection 250Section 28Section 36(1)(iv)Section 438Section 43B

Roshan Hospital, Bhopal vs. DCIT-5(1), Bhopal

In the result, the appeal of assessee is allowed

ITA 42/IND/2022[2019-20]Status: FixedITAT Indore10 Aug 2022AY 2019-20

Bench: Ms.Madhumita Roy & Shri B.M. Biyani(Conducted Through Virtual Court) Assessment Year: 2019-20 Roshan Hospital Dcit-5(1), 7-A-B, Govind Garden, Raisen Bhopal Road, Govindpura, Bhopal- Vs. 462023 (Appellant / Assessee) (Respondent/ Revenue) Pan: Aasfr4278B Appellant By None Respondent By None Date Of Hearing 02.08.2022 Date Of Pronouncement 10.08.2022 O R D E R

Section 143(1)Section 2Section 36(1)(va)Section 43B

Comm of Income Tax(Exemption), Kolkata vs. National Agricultural and Scientific Research Foundation

ITAT/95/2018HC Calcutta08 Feb 2022

Bench: : The Hon’Ble Justice T.S. Sivagnanam A N D The Hon’Ble Justice Supratim Bhattacharya Date : 22Nd September, 2022. Appearance: Mr. Tilak Mitra, Adv. ...For The Appellant Mr. J.P. Khaitan, Sr. Adv. Mrs. Nilanjana Banerjee Pal, Adv. …For The Respondent The Court:- This Appeal Filed By The Revenue Under Section 260A Of The Income Tax Act, 1961 (‘The Act’ For Brevity) Is Directed Against The Order Dated June 15, 2016 Passed By The Income Tax Appellate Tribunal, “C” Bench, Kolkata (In Short The ‘Tribunal’) In M.A. No. 38/Kol/2016 Arising Out Of I.T.A. No. 1414/Kol/2007 For The Assessment Year 2004-2005. The Appeal Was Admitted To Decide The Following Substantial Question Of Law:- “……………..….The Legal Issue That Arises Is Since The Initial Contribution Is Permitted To Be Deducted From The Income & Annual Contribution To A Pension Fund May Also Be Deducted From The Income Of The Employer, Would An Ad Hoc Or Lump Sum Interim Contribution, In Such Circumstances, Be Also Eligible For Deduction. ………………”

Section 260ASection 28Section 36Section 36(1)Section 36(1)(iv)

ACIT, Circle-20(1), New Delhi vs. Punjab & Sind Bank, New Delhi

In the result, the appeals filed by the Revenue challenging the judgment of the Punjab and Haryana High Court in State Bank of Patiala also fail, though law in this respect has been clarified herei...

ITA 631/DEL/2019[2014-15]Status: DisposedITAT Delhi05 Jan 2022AY 2014-15

Bench: Sh. Anil Chaturvedi & Sh. Narender Kumar Choudhary(Through Video Conferencing) Acit Vs. Punjab & Sind Bank Circle – 20(1) Ho-Accounts & Audit New Delhi Department, 1St Floor, 21-Rajendra Place, New Delhi – 110 008 Pan : Aaacp 1206 G (Appellant) (Respondent)

Section 115JSection 143(3)Section 14ASection 36(1)(iv)

Bank of India, Mumbai vs. The Pr. CIT-2, Mumbai

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

ITA 1642/MUM/2020[2016-17]Status: DisposedITAT Mumbai22 Nov 2021AY 2016-17

Bench: Shri Mahavir Singh () & Shri S. Rifaur Rahman () Assessment Year: 2016-17 Bank Of India, The Pr. Commissioner Of Income 8Th Floor, Taxation Department, Vs. Tax-2, Room No. 344, 3Rd Floor, Aayakar Star House, C-5, G Block, Bandra- Kurla Complex, Bandra (East), Bhavan, M.K. Road, Mumbai-400051. Mumbai-400020. Pan No. Aaacb 0472 C Appellant Respondent Assessee By : Mr. C. Naresh, Ar Revenue By : Mr. Rahul Raman, Cit-Dr Date Of Hearing : 31/08/2021 Date Of Pronouncement : 22/11/2021

For Appellant: Mr. C. Naresh, ARFor Respondent: Mr. Rahul Raman, CIT-DR
Section 139(1)Section 143(3)Section 263Section 40

M/S Mplex Networks Pvt Ltd, Bangalore vs. Assistant Commissioner of Income Tax Circle-4(1)(4), Bangalore

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

ITA 3371/BANG/2018[2014-15]Status: DisposedITAT Bangalore27 Sept 2021AY 2014-15

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh Joijode, CAFor Respondent: Shri Priyadarshi Mishra, Addl.CIT(DR)(ITAT), Bengaluru
Section 139(1)Section 36(1)(iv)

M/S Mplex Networks Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-4(1)(2), Bangalore

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

ITA 3370/BANG/2018[2013-14]Status: DisposedITAT Bangalore27 Sept 2021AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh Joijode, CAFor Respondent: Shri Priyadarshi Mishra, Addl.CIT(DR)(ITAT), Bengaluru
Section 139(1)Section 36(1)(iv)

Lubrizol Advanced Materials India Pvt Ltd., Mumbai vs. DCIT-14(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4017/MUM/2019[2015-16]Status: DisposedITAT Mumbai13 Aug 2021AY 2015-16

Bench: Sri Mahavir Singh, Vp & Sri M. Balaganesh, Am आमकय अऩीर सिं./ Ita No. 4017/Mum/2019 (ननधाायण वषा / Assessment Year 2015-16) Lubrizol Advanced Materials India The Dy. Commissioner Of Private Limited. Income Tax-14(2)(1) Room No. 432, 4 T H Industrial Estate, Lbs Marg, फनाभ/ Floor Vikhroli (West), Mumbai-400 079 Aayakar Bhawan, Mk Road, Vs. Mumbai-400 020 (अऩीराथी / Appellant) (प्रत्मथी/ Respondent) स्थामी रेखा सिं./Pan No. Aaaci4361B अऩीराथी की ओय से/ Appellant By : Shri Dhanesh Bafna, Ar प्रत्मथी की ओय से/ Respondent By : Shri Brajendra Kumar, Dr सुनवाई की तायीख / Date Of Hearing: 28.06.2021 घोषणा की तायीख / Date Of Pronouncement: 13.08.2021

For Appellant: Shri Dhanesh Bafna, ARFor Respondent: Shri Brajendra Kumar, DR
Section 143(3)Section 28Section 36Section 36(1)Section 36(1)(iv)Section 37

Manoj Kumar, Gurgaon vs. ACIT, Circle-62(1), New Delhi

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

ITA 978/DEL/2018[2014-15]Status: DisposedITAT Delhi02 Mar 2021AY 2014-15

Bench: Shri Bhavnesh Saini & Shri O.P. Kant[Through Video Conferencing]

Section 143(3)

M/S Wipro Limited vs. The Additional Commissioner of Income-Tax

In the result, the appeal is disposed of in terms of

ITA/315/2012HC Karnataka09 Dec 2020

Bench: ALOK ARADHE,H.T. NARENDRA PRASAD

Section 10ASection 14ASection 260Section 260ASection 36(1)(iv)Section 80

The Royal Bank of Scotland N.V., Kolkata vs. DCIT (International Taxation) - 2(1), Kolkata

In the result, the appeal of assessee is partly allowed

ITA 2619/KOL/2018[2014-15]Status: DisposedITAT Kolkata19 Feb 2020AY 2014-15

Bench: "ी जे. सुधाकर रे"डी, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 143(3)Section 144C(13)Section 144C(5)Section 36Section 36(1)(iv)Section 90

State Bank of India, Mumbai vs. Addl CIT RG 2(2), Mumbai

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed, as indicated above

ITA 3644/MUM/2016[2008-09]Status: DisposedITAT Mumbai03 Feb 2020AY 2008-09

Bench: Sri Mahavir Singh, Vp & Sri G Manjunatha, Am आयकर अपील सुं./ Ita No. 3644/Mum/2016 (ननर्ाारण वर्ा / Assessment Year 2008-09) State Bank Of India The Dy. Commissioner Of 3Rd Floor, Corporate Centre Income Tax, Circle -2(2)(1) बनाम/ Madam Cama Road Mumbai Vs. Nariman Point Mumbai-400021 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा सुं./Pan No. Aaacs8577K

For Appellant: Shri P.J. Pardiwalla &For Respondent: Shri Anadi Varma, CIT-DR&
Section 143(3)Section 147

M/S Ador Fontech Limited, Bangalore vs. The Deputy Commissioner of Income Tax Circle-1(1)(1), Bangalore

ITA 2983/BANG/2018[2012-13]Status: DisposedITAT Bangalore15 Jul 2019AY 2012-13

Bench: Shri A.K.Garodia & Smt.Beena Pillai, Judical Member Ita No.2983(Bang)/2018 (Assessment Year : 2012-13) M/S Ador Fontech Ltd. Bel View, 7, Haudin Road, Bangalore-560 042 Panno.Aabca1724H Appellant Vs The Dy. Commissioner Income Tax, Circle-1(1)(1), Bangalore Respondent

For Appellant: Shri V.K.Gurunathan, AdvocateFor Respondent: Shri C.H.Sundar Rao, CIT
Section 36(1)(iv)Section 36(1)(v)Section 40A(7)