Section 36(1)(viia)(c) of the Income Tax Act

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

Section 36(1)(viia)(c) 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)(viia)(c) is Housing & Urban Development Corporation Ltd. v. Addl.CIT (396 ITR 667), cited in 20 of the 53 judgments on BharatTax that turn on this section.

Leading authorities on Section 36(1)(viia)(c)

Housing & Urban Development Corporation Ltd. v. Addl.CIT
396 ITR 667 · 2017 · High Court
20
citing judgments

A provision made by a public sector unit for the revision of employee pay, based on a government-appointed committee's recommendations, is an allowable business expenditure.

Kanhaiyalal Dudheriya v. JCIT
418 ITR 410 · 2019 · High Court
17
citing judgments

Expenditure incurred towards constructing facilities for obtaining permits and licenses is a prudent business decision and constitutes a revenue expenditure deductible under Section 37(1) of the Income Tax Act, 1961, especially when the assessee's business involves dealing with government authorities.

Rural Electrification Corporation Ltd. (REC) v. Addl. CIT
34 SOT 159 · 2009 · ITAT
15
citing judgments

Deductions under sections 36(1)(viia)(c) and 36(1)(viii) are to be allowed as per the scheme laid down by the ITAT. The issue of allowing these deductions is highly debatable and beyond the scope of rectification under section 154.

Karnataka Forest Plantations Corpn. Ltd. v. CIT
156 ITR 275 · 1985 · High Court
14
citing judgments

Interest paid on borrowed funds cannot be considered an expense incurred wholly and exclusively for the purpose of earning income if the borrowed funds are deposited for short periods and earn interest. The interest income from such deposits is incidental and independent of the borrowings.

PCIT v. PEC Ltd.
451 ITR 136 · High Court
9
citing judgments
Gujarat Toll Road Investment Co. Ltd. v. Asstt. CIT
125 ITD 159 · ITAT
3
citing judgments
Lakshmi Villas Bank Ltd. v. CIT
154 Taxmann 301 · Reported
3
citing judgments
Dy CIT v. Gujarat Road and Infrastructure Co. Ltd.
31 Taxmann.com 137 · 2013 · Reported
3
citing judgments

Judgments on Section 36(1)(viia)(c)

Power Finance Corporation Ltd., New Delhi vs. ACIT, New Delhi

In the result, all these appeals are dismissed

ITA 4919/DEL/2015[2008-09]Status: DisposedITAT Delhi11 Mar 2021AY 2008-09

Bench: Shri Amit Shukla & Shri Anadee Nath Misshra

For Appellant: Ms. Aggarta Gupta, CAFor Respondent: Smt. Sushma Singh, CIT(DR)

DCIT Corporate Circle 2(2), Chennai vs. Infrastructure Development Finance Company Limited, Chennai

In the result, both the appeals of the Revenue are partly

ITA 1913/CHNY/2017[2009-10]Status: DisposedITAT Chennai03 Jul 2018AY 2009-10

Bench: Shri George Mathan & Shri S.Jayaraman

For Appellant: Mr.Sreenivasa Rao,CIT,D.RFor Respondent: Mr.Farrokh V.Irani, C.A
Section 14ASection 36(1)(viii)

DCIT Corporate Circle 2(2), Chennai vs. Infrastructure Development Finance Company Limited, Chennai

In the result, both the appeals of the Revenue are partly

ITA 1912/CHNY/2017[2008-09]Status: DisposedITAT Chennai03 Jul 2018AY 2008-09

Bench: Shri George Mathan & Shri S.Jayaraman

For Appellant: Mr.Sreenivasa Rao,CIT,D.RFor Respondent: Mr.Farrokh V.Irani, C.A
Section 14ASection 36(1)(viii)

DCIT Cir 3(3), Mumbai vs. Small Industries Development Bank of India Ltd, Mumbai

In the result, appeal of the assessee is partly allowed

ITA 4220/MUM/2011[2007-08]Status: DisposedITAT Mumbai23 Mar 2018AY 2007-08

Bench: Shri G.S. Pannu & Shri Pawan Singh

For Respondent: Shri Jayant Kumar
Section 143(3)Section 147Section 234DSection 36(1)(viia)Section 36(1)(viii)

DCIT Cir 3(3), Mumbai vs. Small Industries Development Bank of India Ltd, Mumbai

In the result, appeal of the assessee is partly allowed

ITA 4219/MUM/2011[2006-07]Status: DisposedITAT Mumbai23 Mar 2018AY 2006-07

Bench: Shri G.S. Pannu & Shri Pawan Singh

For Respondent: Shri Jayant Kumar
Section 143(3)Section 147Section 234DSection 36(1)(viia)Section 36(1)(viii)

Small Industries Development Bank of India, Mumbai vs. DCIT RG 3(3), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 4048/MUM/2011[2007-08]Status: DisposedITAT Mumbai23 Mar 2018AY 2007-08

Bench: Shri G.S. Pannu & Shri Pawan Singh

For Respondent: Shri Jayant Kumar
Section 143(3)Section 147Section 234DSection 36(1)(viia)Section 36(1)(viii)

Small Industries Development Bank of India, Mumbai vs. DCIT RG 3(3), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 4047/MUM/2011[2006-07]Status: DisposedITAT Mumbai23 Mar 2018AY 2006-07

Bench: Shri G.S. Pannu & Shri Pawan Singh

For Respondent: Shri Jayant Kumar
Section 143(3)Section 147Section 234DSection 36(1)(viia)Section 36(1)(viii)

Small Industries Development Bank of India, Mumbai vs. DCIT Cir 3(3), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 4045/MUM/2011[2004-05]Status: DisposedITAT Mumbai23 Mar 2018AY 2004-05

Bench: Shri G.S. Pannu & Shri Pawan Singh

For Respondent: Shri Jayant Kumar
Section 143(3)Section 147Section 234DSection 36(1)(viia)Section 36(1)(viii)

Industrial Investment Bank of India Ltd., Kolkata vs. DCIT, Cir-6, Kolkata

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

ITA 1416/KOL/2014[2004-2005]Status: DisposedITAT Kolkata05 Apr 2017AY 2004-2005

Bench: Shri N.V.Vasudevan Jm & Dr. A.L.Saini, Am आयकर अपील सं./Ita No.1416/Kol/2014 ("नधा"रण वष" / Assessment Year :2004-2005) Industrial Investment Bank Vs. Dcit, Circle-6, Kolkata, Of India Limited, Aayakar Bhawan, P-7, 19, Netaji Subhas Road, Chowringhee Square, Kolkata-700001 Kolkata-700001 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabci 0324 D .. (अपीलाथ" /Appellant) (""यथ" / Respondent) राज"व क" ओर से /Revenue By : Shri Sanjay Bhattacharya,Fca "नधा"रती क" ओर से /Assessee By : Shri R.K.Kureel, Jcit सुनवाई क" तार"ख / Date Of Hearing : 28/02/2017 घोषणा क" तार"ख/Date Of Pronouncement 05/04/2017 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: ` The Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year 2004-2005, Is Directed Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals)-Vi, Kolkata, In Appeal No.343/08-09/Cit(A)-Vi/Cir-6/Kol, Dated 29.04.2014, Which In Turn Arises Out Of An Order Passed By The Ao U/S.143(3) Of The Income Tax Act 1961, (Hereinafter Referred To As The ‘Act’), Dated 17.11.2006. 2. Brief Facts Of The Case Qua The Assessee Are That The Assessee Is A Public Sector Undertaking Bank & Its Operations Are Solely In The Segment Of Non-Banking Financial Intermediation Services. The Assessee Being A Financial Institution, Its Activities Are Subject To Guidelines Issued By The Reserve Bank Of India For Banking Companies. During The Financial Year Under Consideration, The Assessee Company Written Off A Sum Of Rs.1,42,48,266/- On Account Of Debts As Irrecoverable. The Assessee Is An Organization To Which The Provisions Of Section 36(1)(Viia) Is Applicable.

For Appellant: Shri R.K.Kureel, JCITFor Respondent: Shri Sanjay Bhattacharya,FCA
Section 143(3)Section 2(45)Section 36Section 36(1)(viia)Section 5

Ifci Ltd vs. Commissioner of Income Tax

Appeal is dismissed

ITA/1931/2010HC Delhi30 Sept 2011

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 36Section 36(1)(viia)Section 36(1)(viii)

Ifci Ltd vs. Commissioner of Income Tax

Appeal is dismissed

ITA-1931/2010HC Delhi30 Sept 2011
Section 36Section 36(1)(viia)Section 36(1)(viii)

Ifci Ltd vs. Commissioner of Income Tax

Appeal is dismissed

ARB.A.-ITA/1931HC Delhi30 Sept 2011
Section 36Section 36(1)(viia)Section 36(1)(viii)

Ifci Ltd vs. Commissioner of Income Tax

Appeal is dismissed

ITA - 1931 / 2010HC Delhi30 Sept 2011
Section 36Section 36(1)(viia)Section 36(1)(viii)