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)

DCIT 4(3), Mumbai vs. Kotak Securities Ltd, Mumbai

The appeal of the AO stands dismissed

ITA 2096/MUM/2014[2010-11]Status: DisposedITAT Mumbai11 Mar 2016AY 2010-11

Bench: S/Sh.Rajendra & Amit Shuklaआयकर अपील सं./I.T.A./2096/Mum/2014,िनधा"रण वष" /Assessment Year: 2010-11 Dcit-4(3), M/S. Kotak Securities Ltd. 6Th Floor, Room No.649 1St Floor, Bakhtawar,229 Vs. Aayakar Bhavan Nariman Point,Mumbai-400 021. Mumbai-400 020. Pan: Aaack 3436 F (अपीलाथ" /Appellant) (""थ" / Respondent) आयकर अपील सं./I.T.A./1232/Mum/2014,िनधा"रण वष" /Assessment Year: 2010-11 M/S. Kotak Securities Ltd. Vs. Dcit-4(3), Mumbai. Mumbai-400 020. (अपीलाथ" /Appellant) (""थ" / Respondent) Revenue By: Ms. Malathi Sridharan Assessee By: F.V. Irani सुनवाई की तारीख / Date Of Hearing: 09.03.2016 घोषणा की तारीख / Date Of Pronouncement: 11.03.2016 आयकर अिधिनयम,1961 की धारा 254(1)के अ"ग"त आदेश Order U/S.254(1)Of The Income-Tax Act,1961(Act) लेखा सद" राजे" के अनुसार Per Rajendra, Am- Challenging The Order, Dated 24/01/2014, Of The Cit(A)-8,Mumbai The Assessing Officer (Ao) & The Assessee Have Filed The Cross Appeals For The Year Under Consideration Raising Various Grounds Of Appeals.Assessee-Company,Engaged In The Business Of Share Broking Etc.,Filed Its Return Of Income On 28/09/2010,Declaring Total Income Of Rs.3,96,43,36,790/-. The Ao Completed The Assess -Ment,U/S.143 (3) Of The Act,On 01/03/2013,Determining The Income Of The Assessee At Rs.4,08, 95,72,691/-.

For Appellant: F.V. IraniFor Respondent: Ms. Malathi Sridharan
Section 14Section 143Section 14ASection 254(1)

Kotak Securities Ltd, Mumbai vs. Addl CIT RG 4(3), Mumbai

The appeal of the AO stands dismissed

ITA 1232/MUM/2014[2010-11]Status: DisposedITAT Mumbai11 Mar 2016AY 2010-11

Bench: S/Sh.Rajendra & Amit Shuklaआयकर अपील सं./I.T.A./2096/Mum/2014,िनधा"रण वष" /Assessment Year: 2010-11 Dcit-4(3), M/S. Kotak Securities Ltd. 6Th Floor, Room No.649 1St Floor, Bakhtawar,229 Vs. Aayakar Bhavan Nariman Point,Mumbai-400 021. Mumbai-400 020. Pan: Aaack 3436 F (अपीलाथ" /Appellant) (""थ" / Respondent) आयकर अपील सं./I.T.A./1232/Mum/2014,िनधा"रण वष" /Assessment Year: 2010-11 M/S. Kotak Securities Ltd. Vs. Dcit-4(3), Mumbai. Mumbai-400 020. (अपीलाथ" /Appellant) (""थ" / Respondent) Revenue By: Ms. Malathi Sridharan Assessee By: F.V. Irani सुनवाई की तारीख / Date Of Hearing: 09.03.2016 घोषणा की तारीख / Date Of Pronouncement: 11.03.2016 आयकर अिधिनयम,1961 की धारा 254(1)के अ"ग"त आदेश Order U/S.254(1)Of The Income-Tax Act,1961(Act) लेखा सद" राजे" के अनुसार Per Rajendra, Am- Challenging The Order, Dated 24/01/2014, Of The Cit(A)-8,Mumbai The Assessing Officer (Ao) & The Assessee Have Filed The Cross Appeals For The Year Under Consideration Raising Various Grounds Of Appeals.Assessee-Company,Engaged In The Business Of Share Broking Etc.,Filed Its Return Of Income On 28/09/2010,Declaring Total Income Of Rs.3,96,43,36,790/-. The Ao Completed The Assess -Ment,U/S.143 (3) Of The Act,On 01/03/2013,Determining The Income Of The Assessee At Rs.4,08, 95,72,691/-.

For Appellant: F.V. IraniFor Respondent: Ms. Malathi Sridharan
Section 14Section 143Section 14ASection 254(1)

ITO WD 19(3)(2), Mumbai vs. Syed Kamrul Islam, Mumbai

In the result, the appeal filed by the assessee is partly allowed and the appeal filed by the Revenue is dismissed

ITA 948/MUM/2014[2006-07]Status: DisposedITAT Mumbai24 Feb 2016AY 2006-07

Bench: Shri C.N. Prasad & Shri Rajesh Kumarआयकर अपील सं/ I.Ta No.1115/Mum/2014 ("नधा"रण वष" / Assessment Year: 2006-07 बनाम/ Shri Syed Kamrul Islam, The Ito 19(3)(2), Room No. 217, Piramal Chambers, Vs. Noor Ali Masjid Gali, Lalbaug, Raju Nagar, Bazar Road, Mumbai-400 012 Bandra (W), Mumbai-400 050 आयकर अपील सं/ I.Ta No.948/Mum/2014 ("नधा"रण वष" / Assessment Year: 2006-07 बनाम/ The Ito 19(3)(2), Shri Syed Kamrul Islam, Piramal Chambers, Room No. 217, Vs. Lalbaug, Noor Ali Masjid Gali, Mumbai-400 012 Raju Nagar, Bazar Road, Bandra (W), Mumbai-400 050 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Afzps 3205D (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Assessee By: Shri Vipul J. Shah ""यथ" क" ओर से/Department By: Shri R.A. Dhyani सुनवाई क" तार"ख / Date Of Hearing :03.02.2016 घोषणा क" तार"ख /Date Of Pronouncement :24.02.2016 आदेश / O R D E R Per C.N. Prasad, Jm: These Are Cross Appeals By The Assessee & The Revenue Against The Very Same Order Of The Ld. Cit(A)-30, Mumbai Dated 04.12.2013 Pertaining To Assessment Year 2006-07. Both These Appeals Are Heard Together & They Are Disposed Of By This Common Order For The Sake Of Convenience.

For Appellant: Shri Vipul J. ShahFor Respondent: Shri R.A. Dhyani
Section 143(3)Section 194CSection 37(1)Section 40

Syed Kamrul Islam, Mumbai vs. ITO 19(3)(2), Mumbai

In the result, the appeal filed by the assessee is partly allowed and the appeal filed by the Revenue is dismissed

ITA 1115/MUM/2014[2006-07]Status: DisposedITAT Mumbai24 Feb 2016AY 2006-07

Bench: Shri C.N. Prasad & Shri Rajesh Kumarआयकर अपील सं/ I.Ta No.1115/Mum/2014 ("नधा"रण वष" / Assessment Year: 2006-07 बनाम/ Shri Syed Kamrul Islam, The Ito 19(3)(2), Room No. 217, Piramal Chambers, Vs. Noor Ali Masjid Gali, Lalbaug, Raju Nagar, Bazar Road, Mumbai-400 012 Bandra (W), Mumbai-400 050 आयकर अपील सं/ I.Ta No.948/Mum/2014 ("नधा"रण वष" / Assessment Year: 2006-07 बनाम/ The Ito 19(3)(2), Shri Syed Kamrul Islam, Piramal Chambers, Room No. 217, Vs. Lalbaug, Noor Ali Masjid Gali, Mumbai-400 012 Raju Nagar, Bazar Road, Bandra (W), Mumbai-400 050 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Afzps 3205D (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Assessee By: Shri Vipul J. Shah ""यथ" क" ओर से/Department By: Shri R.A. Dhyani सुनवाई क" तार"ख / Date Of Hearing :03.02.2016 घोषणा क" तार"ख /Date Of Pronouncement :24.02.2016 आदेश / O R D E R Per C.N. Prasad, Jm: These Are Cross Appeals By The Assessee & The Revenue Against The Very Same Order Of The Ld. Cit(A)-30, Mumbai Dated 04.12.2013 Pertaining To Assessment Year 2006-07. Both These Appeals Are Heard Together & They Are Disposed Of By This Common Order For The Sake Of Convenience.

For Appellant: Shri Vipul J. ShahFor Respondent: Shri R.A. Dhyani
Section 143(3)Section 194CSection 37(1)Section 40