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)

The Graduates Co-Operative Bank Ltd, Mysore vs. Additional Commissioner of Income Tax, Range-2, Mysore

In the result, the appeal filed by the assessee is allowed in the terms indicated above

ITA 1823/BANG/2018[2012-13]Status: DisposedITAT Bangalore12 Jul 2019AY 2012-13

Bench: Shri Arun Kumar Garodia & Shri Pavan Kumar Gadaleassessment Year : 2012-13 M/S. The Graduates’ Co- The Additional Operative Bank Ltd., Commissioner Of # K-9, 473/1, Chamaraja Vs. Income-Tax, Double Road, Range – 2, Mysore. Mysore. Pan: Aaaat8676L Appellant Respondent Assessee By : Shri Narendra Sharma, Advocate Revenue By : Dr. P.V. Pradeep Kumar, Addl. Cit (Dr) Date Of Hearing : 02.07.2019 Date Of Pronouncement : 12.07.2019

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Dr. P.V. Pradeep Kumar, Addl. CIT (DR)
Section 194A(3)Section 234Section 36(1)Section 37

ACIT Circle 1, Salem vs. M/S Tamilnadu State Transport Corporation (Slem) Ltd, Salem

In the result, the appeal in ITA No

ITA 814/CHNY/2018[2012-13]Status: DisposedITAT Chennai05 Jul 2019AY 2012-13
For Appellant: Mr.Sridhar Dora,JCIT,D.RFor Respondent: Ms.S.Sriniranjani,Advocate
Section 263Section 36(1)(iv)

ACIT Circle 1, Salem vs. M/S Tamilnadu State Transport Corporation (Slem) Ltd, Salem

In the result, the appeal in ITA No

ITA 813/CHNY/2018[2008-09]Status: DisposedITAT Chennai05 Jul 2019AY 2008-09
For Appellant: Mr.Sridhar Dora,JCIT,D.RFor Respondent: Ms.S.Sriniranjani,Advocate
Section 263Section 36(1)(iv)

The Commissioner of Income Tax, Cochin vs. M/S.Appollo Tyres Ltd., Kochi

ITA/69/2010HC Kerala13 Mar 2019

Bench: The Commissioner Of Income Tax. After Considering The Plus & Minus Points, The Appeal Was Finalised As Per Annexure-B Order, Whereby Some

Section 143(3)Section 36(1)(iv)Section 37Section 40A(9)Section 43A

The Commissioner of Income Tax vs. M/S.Appollo Tyres Ltd

ITA/60/2010HC Kerala13 Mar 2019
For Appellant: THE COMMISSIONER OF INCOME TAX, COCHINFor Respondent: M/S.APPOLLO TYRES LTD
Section 143Section 40A(9)

The Commissioner of Income Tax, Cochin vs. M/S. Appollo Tyres Ltd., Kochi

ITA/47/2010HC Kerala13 Mar 2019

Bench: The Commissioner Of Income Tax. After Considering The Plus & Minus Points, The Appeal Was Finalised As Per Annexure-B Order, Whereby Some Points Were Answered In Favour Of The Assessee, While Some Additions Were Made In Favour

For Appellant: M/S. APPOLLO TYRES LTD., KOCHIFor Respondent: THE COMMISSIONER OF INCOME TAX
Section 143(3)Section 36(1)(iv)Section 37Section 40A(9)

Eveready Industries India Ltd., Kolkata vs. DCIT, Circle - 11(1), Kolkata

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

ITA 655/KOL/2018[2012-13]Status: DisposedITAT Kolkata13 Feb 2019AY 2012-13

Bench: Shri P.M. Jagtap, Vice-(Kz) & Shri S.S. Viswanethra Ravi

Section 115JSection 143(3)Section 144C(3)Section 14ASection 263Section 30Section 35Section 35DSection 36(1)(iv)Section 37

M/S.Kerala State Co-Op Agricultural & Rural Dev Bank Ltd, Trivandrum vs. The ITO WD-2(1), Trivandrum

ITA 581/COCH/2018[2013-14]Status: DisposedITAT Cochin07 Feb 2019AY 2013-14

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Jose JacobFor Respondent: Smt.A.S.Bindhu, Sr.DR
Section 80PSection 80P(2)(a)

M/S.Kerala State Co-Op Agricultural & Rural Dev Bank Ltd, Trivandrum vs. The ITO WD-2(1), Trivandrum

ITA 580/COCH/2018[2009-10]Status: DisposedITAT Cochin07 Feb 2019AY 2009-10

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Jose JacobFor Respondent: Smt.A.S.Bindhu, Sr.DR
Section 80PSection 80P(2)(a)

M/S.Kerala State Co-Op Agricultural & Rural Dev Bank Ltd, Trivandrum vs. The ITO WD-2(1), Trivandrum

ITA 579/COCH/2018[2008-09]Status: DisposedITAT Cochin07 Feb 2019AY 2008-09

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Jose JacobFor Respondent: Smt.A.S.Bindhu, Sr.DR
Section 80PSection 80P(2)(a)

DCIT, CC-III, Ludhiana vs. M/S Sel Textiles Limited, Ludhiana

ITA 300/CHANDI/2018[2014-15]Status: DisposedITAT Chandigarh14 Nov 2018AY 2014-15

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumar

For Appellant: Sh. G.S. Phani Kishore, CIT DRFor Respondent: Sh. Ashwani Kumar, CA
Section 36Section 36(1)(iii)Section 36(1)(iv)

The Braithwaite Burn & Jessop Construction Company Ltd., Kolkata vs. ITO, Ward - 11(1), Kolkata

Appeal is allowed

ITA 985/KOL/2018[2012-13]Status: DisposedITAT Kolkata14 Nov 2018AY 2012-13

Bench: Shri S.S, Godaraassessment Year:2012-13 The Braithwaite Burn & Income Tax Officer, बनाम / Jessop Construction Co. Ward-11(1), Aayakar V/S. Ltd. [In The Case Of Bharat Bhawan, P-7, Bhari Udyog Nigam Ltd. Chowringhee Square, Amalgamating Co.] 27, Kolkata-69 R.N. Mukherjee Road, Kolkata-700 001 [Pan No.Aaact 9760B] .. अपीलाथ" /Appellant ""यथ" /Respondent Miss. Ananya Rath, Advocate अपीलाथ" क" ओर से/By Appellant Shri Saurav Kumar, Addl. Cit-Dr ""यथ" क" ओर से/By Respondent 06-11-2018 सुनवाई क" तार"ख/Date Of Hearing 14-11-2018 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R This Assessee’S Appeal For Assessment Year 2012-13 Is Directed Against The Commissioner Of Income-Tax (Appeals)-4, Kolkata’S Order Dated 13.02.2018 Passed In Case No.744/Cit(A)-4/W-11(1)/15-16 Involving Proceedings U/S. 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. The Assessee’S First Former Substantive Ground On Merits Seeks To Challenge Both The Lower Authorities’ Action Disallowing 0.5% Of Average Investments Under Rule 8D(2)(Iii) Of The Income Tax Rule, 1962 R.W.S 14A Of The Act. As Per Assessment Order Dated 30.03.2015 The Revenue’S Case Is That Assessee Had Invested An Amount Of ₹45,84,51,220/- In The Relevant Previous Year For Earning Exempt Income. If Fails To Dispute That There Is No Exempt Income Recorded To Have Been Derived In The Relevant Previous Year In Assessment Order. I Therefore Follow Hon'Ble Jurisdictional High

Section 139(1)Section 143(3)Section 14ASection 36(1)(iv)

Gujarat State Co. Op. Fruit and Vegetable Marketing Federation Ltd., Surat vs. The Dy. Commissioner of Income Tax, Circle-2(3), Surat

In the result, the appeal of the assessee stands allowed

ITA 2502/AHD/2016[2013-14]Status: DisposedITAT Surat08 Oct 2018AY 2013-14

Bench: C .M. Garg & O. P. Meenaआ.अ.सं./I.T.A No.2502/Ahd/2016/Srt िनधा"रण वष"/Assessment Year:2013-14 Gujarat State Co-Op. Fruit & V. Deputy Commissioner Of Vegetable Marketing Federation Income-Tax, Ltd. , 43 Sardar Baug Bardoli Circle – 2(3), Surat 394602 Surat Pan:Aaag0983H अपीलाथ" Appellant ""यथ"/Respondent Shri Shailesh Vaidya, Ca िनधा"रती क" ओर से Assessee By Shri Vinod Kumar, Sr. D.R. राज"व क" ओर से Revenue By 31.10.2018 सुनवाई क" तारीख Date Of Hearing 01.11.2018 उ"ोषणा क" तारीख Date Of Pronouncement आदेश /Order Per O. P. Meena, Am 1. This Appeal At The Instance Of The Assessee Is Directed Against An Order Dated 30.08.2016 Passed By Learned Commissioner Of Income Tax (Appeals)-1,Surat (In Short “The Cit (A)”) For The Assessment Year 2013- 14. 2. Ground No. 1 States That The Ld. Cit (A) Erred In Confirming The Action Of The Ao In Not Granting The Claim Of Deduction Of Rs. 2,45,017 On Account Of Provident Fund. 3. Brief Facts Are That During The Course Of Assessment Proceedings, The Assessee Submitted A Revised Computation Of Total Income Stating The Gujarat State Co-Op. Fruit & Vegetable Marketing Federation Ltd.-2502-Ahd/2016-A.Y. 13-14 V. Dcit2(3) Surat Page 2 Of 11

Section 2Section 2(38)Section 36(1)(iv)Section 38

The ACIT, Eluru vs. M/S. Jeypote Sugar Company Ltd., Chagallu

In the result, appeal filed by the revenue and the CO filed by the assessee are dismissed

ITA 268/VIZ/2015[2010-11]Status: DisposedITAT Visakhapatnam31 Jul 2018AY 2010-11

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Bleacit, Circle-1, Vs. M/S. The Jeypore Sugar Eluru. Company Ltd., D.No. 6/69, Chagallu, W.G. District. Pan No. Aaact 9942 R (Appellant) (Respondent) C.O.No. 50/Viz/2016 (Arising Out Of Ita No. 268/Viz/2015) (Asst. Year : 2010-11) M/S. The Jeypore Sugar Vs. Acit, Circle-1, Company Ltd., D.No. 6/69, Eluru. Chagallu, W.G. District. Pan No. Aaact 9942 R (Applicant) (Respondent)

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Shri K.C. Das – Sr.DR
Section 36Section 36(1)(iv)Section 369(1)(iv)Section 37Section 40A(7)Section 40k

Vaas Industries Pvt. Ltd., Chennai vs. DCIT, Chennai

In the result the appeal of the assessee for the assessment year 2007-08 is partly allowed and the appeal of the assessee for the assessment year 2008-09 is allowed for statistical purposes

ITA 79/CHNY/2017[2008-09]Status: DisposedITAT Chennai16 Jan 2018AY 2008-09

Bench: Shri N.R.S. Ganesan & Shri A.Mohan Alankamony

For Respondent: Shri AR.V. Sreenivasan, JCIT
Section 143(1)Section 147Section 194CSection 250(6)Section 36(1)(v)Section 40Section 43B

Dy.Commissioner of Income Tax, (Exemptions) Circle-2, Ahmedabad vs. Institute of Rural Management, Anand

In the result, appeal of the Revenue is dismissed

ITA 2495/AHD/2015[2011-12]Status: DisposedITAT Ahmedabad13 Dec 2017AY 2011-12

Bench: Shri S.S. Godara & Shri Pradip Kumar Kediaआयकर अपील सं./I.T.A. No.2495/Ahd/2015 ("नधा"रण वष" / Assessment Year : 2011-12)

For Respondent: Shri Sanjay Shah, AR
Section 2(3)Section 2(38)Section 36

Principal Commissioner of Income Tax-07 vs. Punjab & Sind Bank

The appeal is dismissed

ITA/737/2017HC Delhi18 Sept 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 36Section 37

I T C Limited, Kolkata vs. DCIT, Circle - 8, Kolkata

In the result, the appeal of the assessee in ITA No

ITA 253/KOL/2011[2006-07]Status: DisposedITAT Kolkata05 Apr 2017AY 2006-07

Bench: M Balaganesh & Shri Partha Sarathi Chaudhury

Section 143(3)Section 36Section 36(1)(iv)Section 40A(9)

DCIT, Cir-I, Kolkata vs. M/S Reliance Jute Mills International Ltd., Kolkata

In the result, the appeal of the revenue is dismissed

ITA 897/KOL/2014[2008-2009]Status: DisposedITAT Kolkata17 Mar 2017AY 2008-2009
Section 36Section 36(1)(iv)Section 36(1)(v)Section 40A(7)Section 40A(7)(a)Section 43B

M/S Karassery Service Co-Op Bank, Calicut vs. The ITO, Calicut

ITA 417/COCH/2014[2010-11]Status: DisposedITAT Cochin15 Mar 2017AY 2010-11

Bench: Shri Abraham P. George & Shri George George. K.] आयकर अपील सं./I.T.A. No.417/Mds/2014 िनधा"रण वष" /Assessment Year : 2010-2011. M/S. Karassery Service Co- The Income Tax Officer, Operative Bank, Vs. Ward 2(3) Karassery P.O. Kozhikode. Kozhikode.

For Appellant: Shri. CBM Warrier, CAFor Respondent: Shri. A. Dhanaraj, Sr. D.R
Section 139Section 142(1)Section 144Section 36(1)Section 80A(5)Section 80PSection 80P(2)Section 80P(2)(a)Section 80P(4)