Section 37(1) of the Income Tax Act

The decision most relied on for Section 37(1) is CIT v. Reliance Utilities & Power Ltd. (313 ITR 340), cited in 2,118 of the 6,995 judgments on BharatTax that turn on this section.

Leading authorities on Section 37(1)

CIT v. Reliance Utilities & Power Ltd.
313 ITR 340 · 2009 · High Court
2,118
citing judgments

Where an assessee claims that investments were made out of own funds, interest disallowance under Section 14A read with Rule 8D may not apply if the assessee demonstrates the availability of sufficient interest-free funds to cover such investments.

Goetze (India) Ltd. v. CIT
284 ITR 323 · 2006 · Supreme Court
1,842
citing judgments

An assessee cannot raise a new claim or a claim not made in the original or revised return of income for the first time directly before the Assessing Officer during assessment proceedings.

Radhasoami Satsang v. CIT
193 ITR 321 · 1992 · Supreme Court
1,695
citing judgments

The principle of consistency applies in tax matters, meaning a fundamental aspect found to be true in one assessment year should not be changed in a subsequent year if the order was not challenged.

Maxopp Investment Ltd. v. CIT
402 ITR 640 · 2018 · Supreme Court
1,596
citing judgments

Disallowance under Section 14A is not automatic and requires the Assessing Officer to record satisfaction before applying Rule 8D. Only investments yielding exempt income are considered for disallowance, irrespective of their strategic nature.

Cheminvest Ltd. v. CIT
378 ITR 33 · 2015 · High Court
1,569
citing judgments

A disallowance under Section 14A of the Income-tax Act, 1961, for expenditure incurred in relation to exempt income cannot be made if the assessee has not earned any exempt income during the relevant previous year.

Checkmate Services Pvt. Ltd. v. CIT
143 Taxmann.com 178 · 2022 · Supreme Court
1,392
citing judgments

Employee contributions to provident fund and ESI deposited by an employer beyond the due dates prescribed under the respective special Acts are not allowable as a deduction under section 36(1)(va) of the Income-tax Act, 1961. Such disallowance can be made during processing under section 143(1).

CIT v. HDFC Bank Ltd.
366 ITR 505 · 2014 · High Court
1,261
citing judgments

When an assessee possesses interest-free funds sufficient to cover investments yielding tax-free income, it is presumed that such investments were made from these interest-free funds, precluding disallowance of interest expenditure under Section 14A.

Godrej & Boyce Mfg. Co. Ltd. v. DCIT
328 ITR 81 · 2010 · High Court
1,183
citing judgments

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

CIT v. Woodward Governor India Pvt. Ltd.
312 ITR 254 · 2009 · Supreme Court
968
citing judgments

Foreign exchange fluctuations, whether gains or losses, are inextricably linked to the underlying business transaction and must be accounted for under the mercantile system. The Supreme Court also affirmed the standard accounting principle of valuing stock at cost or net realisable value, whichever is lower.

CIT v. Excel Industries Ltd.
358 ITR 295 · 2013 · Supreme Court
935
citing judgments

When an income or expenditure is revenue neutral across different assessment years, where any benefit derived is offset by a corresponding liability or reversal, no additional tax liability arises, particularly concerning income recognition under the mercantile system of accounting.

Judgments on Section 37(1)

Hoogly Dock & Port Engineers Ltd., Kolkata vs. DCIT, Cir. 1(1), Kolkata

In the result, appeal of the assessee is partly allowed

ITA 1474/KOL/2023[2020-21]Status: DisposedITAT Kolkata17 Apr 2024AY 2020-21

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 1474/Kol/2023 Assessment Year: 2020-21 Hoogly Dock & Port Engineers Ltd. Dcit, Circle-1(1), Kolkata C/O. Syama Prasad Mookerjee Port Vs 15, Strand Road Kolkata - 700001 [Pan : Aaach7473B] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri K.M. Sundaram, C.A. Revenue By : Shri Rakesh Kumar Das, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 21/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 17/04/2024 आदेश/O R D E R Per Dr. Manish Borad: This Appeal At The Instance Of The Assessee Is Directed Against The Order Of The National Faceless Appeal Centre, Delhi (In Short ‘Ld. First Appellate Authority’) Dt. 20/11/2023 Which Is Arising Out Of The Assessment Order U/S 143(3)/144B Of The Income-Tax Act, 1961 (Hereinafter ‘The Act’), Dt. 06/09/2022 Relevant To Assessment Year 2020-21 Framed By Assessment Unit, Income Tax Department. 2. Facts In Brief Are That The Assessee Is A Company Fully Owned By The Government Of India & Is A Public Sector Undertaking Carrying On The Business Of Building & Repair Of Ships & Boats. For The Year Under Consideration, E-Return Was Furnished On 27/01/2021 Which Was Subsequently Revised On 01/02/2021 Declaring Income Of Rs.1,53,68,81,820/-. After Serving Of Valid Notice U/S 143(2) & 142 (1)

For Appellant: Shri K.M. Sundaram, C.AFor Respondent: Shri Rakesh Kumar Das, CIT, D/R
Section 143(2)Section 143(3)Section 28Section 35DSection 40

Dy.CIT. CC.5(2) Cent. RG. -5, Mumbai vs. M/S. Usv Pvt. Ltd, Mumbai

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

ITA 2574/MUM/2021[2012-13]Status: DisposedITAT Mumbai01 Apr 2024AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Shri Gagan Goyal, Am आयकर अपील सं/ I.T.A. No.2574/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2012-13) & आयकर अपील सं/ I.T.A. No.2356/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2013-14) Dcit-Cc-5(2) बिधम/ M/S. Usv Pvt. Ltd. Central Range-5, Room Arvind Vithal Gandhi Vs. No.1908, Air India Building, Chowk, Govandi, Nariman Point, Mumbai- Mumbai-400088. 400021. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacu1366N (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Paras Savla Shri Pratik Poddar Revenue By: Smt Mahita Nair (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 09/02/2024 घोषणा की तारीख /Date Of Pronouncement: 01/04/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: These Are Appeals Preferred By The Revenue Against The Order Of The Ld. Commissioner Of Income Tax (Appeals), [Hereinafter “Ld. Cit(A)], Mumbai Dated 31.08.2020 & Order Dated 10.03.2021 For The Assessment Year 2012-13 & Ay. 2013-14 Respectively. Since Issues In Both The Years Were The Same, Both These Appeals Were Heard Together. Both The Parties Also Agreed That There Is No Change Of Facts Or Position In Law Across Both These Years & Therefore Argued Them Together Raising Similar Arguments On These Issues. We Accordingly Dispose Both The Appeals By This Common Order.

For Appellant: Shri Paras SavlaFor Respondent: Smt Mahita Nair (Sr. DR)
Section 115JSection 92C

Dy.CIT C C 5(2) Central RG-5, Mumbai vs. M/S. Usv Private Ltd, Mumbai

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

ITA 2356/MUM/2021[2013-14]Status: DisposedITAT Mumbai01 Apr 2024AY 2013-14

Bench: Shri Aby T. Varkey, Jm & Shri Gagan Goyal, Am आयकर अपील सं/ I.T.A. No.2574/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2012-13) & आयकर अपील सं/ I.T.A. No.2356/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2013-14) Dcit-Cc-5(2) बिधम/ M/S. Usv Pvt. Ltd. Central Range-5, Room Arvind Vithal Gandhi Vs. No.1908, Air India Building, Chowk, Govandi, Nariman Point, Mumbai- Mumbai-400088. 400021. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacu1366N (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Paras Savla Shri Pratik Poddar Revenue By: Smt Mahita Nair (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 09/02/2024 घोषणा की तारीख /Date Of Pronouncement: 01/04/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: These Are Appeals Preferred By The Revenue Against The Order Of The Ld. Commissioner Of Income Tax (Appeals), [Hereinafter “Ld. Cit(A)], Mumbai Dated 31.08.2020 & Order Dated 10.03.2021 For The Assessment Year 2012-13 & Ay. 2013-14 Respectively. Since Issues In Both The Years Were The Same, Both These Appeals Were Heard Together. Both The Parties Also Agreed That There Is No Change Of Facts Or Position In Law Across Both These Years & Therefore Argued Them Together Raising Similar Arguments On These Issues. We Accordingly Dispose Both The Appeals By This Common Order.

For Appellant: Shri Paras SavlaFor Respondent: Smt Mahita Nair (Sr. DR)
Section 115JSection 92C