Section 37 of the Income Tax Act

The decision most relied on for Section 37 is Empire Jute Co. Ltd. v. CIT (124 ITR 1), cited in 622 of the 4,334 judgments on BharatTax that turn on this section.

Leading authorities on Section 37

Empire Jute Co. Ltd. v. CIT
124 ITR 1 · 1980 · Supreme Court
622
citing judgments

Expenditure is classified as revenue or capital based on its practical business effect, necessity, or expediency, rather than solely on the juristic classification of rights; an enduring benefit does not automatically make an expenditure capital if it facilitates trading operations or business efficiency.

Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT
374 ITR 118 · 2015 · High Court
499
citing judgments

The existence of an international transaction for Advertising and Marketing Promotion (AMP) expenditure requires the revenue to discharge the burden of proof. An explanation inserted under Section 92B does not automatically make AMP expenditure an international transaction.

CIT v. Dalmia Cement (Bharat) Ltd.
254 ITR 377 · 2002 · High Court
417
citing judgments

When there is a nexus between an expenditure and the purpose of business, incurred on grounds of commercial expediency, the Revenue cannot question its reasonableness or assume the role of the businessman to compel profit maximization. This principle applies even if the business is not that of the assessee itself.

Eastern Investments Ltd. v. CIT
38 ITR 601 · 1960 · Supreme Court
346
citing judgments

Expenditure must be commercially expedient for carrying on the business, and it is not for revenue authorities to dictate how an assessee should conduct its business. The court will not question the business expediency of a transaction, even if a third party also benefits.

Sassoon J. David & Co. Pvt. Ltd. v. CIT
118 ITR 261 · 1979 · Supreme Court
323
citing judgments

An expense incurred by an assessee for its own business, such as advertising, marketing, and promotional (AMP) expenses, cannot be disallowed merely because it incidentally or indirectly benefits the assessee's sister concerns or associated enterprises.

Biocon Ltd. v. DCIT
35 Taxmann.com 335 · 2013 · ITAT
322
citing judgments

The discount arising from the grant of Employee Stock Option Plans (ESOPs) is an allowable business expenditure under Section 37(1) of the Income-tax Act, 1961, as it is an ascertained liability, not a contingent one, and constitutes a revenue expense rather than a capital expense.

Skycell Communications Ltd. v. DCIT
251 ITR 53 · 2001 · High Court
253
citing judgments

Technical services involve human intervention and expertise, not just routine or machine-based operations. Routine customer support and standard facility provision through technology do not constitute technical services under the Act.

India Cements Ltd. v. CIT
60 ITR 52 · 1966 · Supreme Court
247
citing judgments

Expenses incurred for obtaining a loan for the purpose of the assessee's business, such as debenture discount, bank guarantee charges, and stamp duty, are considered revenue expenditure. These liabilities, though potentially spread over time, are deductible as revenue expenses.

CIT v. Madras Auto Service (P) Ltd.
233 ITR 468 · 1998 · Supreme Court
246
citing judgments

Expenditure providing an enduring advantage, such as upfront lease rent for land, is revenue expenditure if no capital asset is acquired or generated, allowing for deduction under Section 37, even when capitalized in the books of account.

Tata Consultancy Services v. State of Andhra Pradesh
271 ITR 401 · 2004 · Supreme Court
231
citing judgments

The sale of 'canned software' in physical form is the sale of a copyrighted article and constitutes 'goods,' distinct from the underlying copyright. This case provides foundational principles for distinguishing copyrighted works from copyrighted articles and for what qualifies as 'production or manufacturing of goods or articles' under tax laws.

Judgments on Section 37

The ACIT, Central Circle-3(2), Chennai vs. M/S.Va Tech Wabag Limited, Chennai

In the result, the appeals of the revenue are decided as under:-

ITA 326/CHNY/2021[2016-17]Status: DisposedITAT Chennai16 Oct 2024AY 2016-17

Bench: Shri Aby T Varkey & Shri Amitabh Shuklaआयकर अपील सं./It(Tp) No.7/Chny/2021, Assessment Year-2013-14 आयकर अपील सं./ It(Tp) No.8/Chny/2021, Assessment Year-2014-15 आयकर अपील सं./ It(Tp) No.9/Chny/2021, Assessment Year-2015-16 आयकर अपील सं./ Ita No.326/Chny/2021, Assessment Year-2016-17 The Assistant Commissioner Of Income Tax, M/S. V.A Tech Wabag Limited, Corporate Circle-3(2) No.17, Wabag House, Chennai 200 Feet Radial Road, Sunnambukolathur, Chennai – 600 006. [Pan: Aabcv0225G] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Appellant By : Shri Ramesh Kutty, Advocate प्रत्यर्थी की ओर से /Respondent By : Ms. C. Vatchala, Cit सुनवाई की तारीख/Date Of Hearing : 27.08.2024 घोषणा की तारीख /Date Of Pronouncement : 16.10.2024 आदेश / O R D E R Amitabh Shukla, A.M : Delay S. Appel- Appeal Nos. Ays Cit(A) Order Details Respondent In Filing No. Lant Appeal A B C D E F G Acit, Din No.Itba / Apl / M / 250 / M/S. V.A Tech It(Tp)-7 / Cc- 2020-21 / 1029389607 (1) Wabag 1 2013-14 4 Days Chny/2021 3(2), Dt.31.12.2020 Limited, Chennai Din No.Itba / Apl / M / 250 / It(Tp)-8 / 2 2014-15 2020-21 / 1029389231 (1) 4 Days Chny/2021 Dt.31.12.2020 Din No.Itba / Apl / M / 250 / It(Tp)-9 / 3 2015-16 2020-21 / 1029389414 (1) 4 Days Chny/2021 Dt.31.12.2020 Din No.Itba / Apl / M / 250 / It(Tp)-326 3 4 2016-17 2020-21 / 1031510911 (1) /Chny/2021 Months Dt.16.03.2021

For Appellant: Shri Ramesh Kutty, AdvocateFor Respondent: Ms. C. Vatchala, CIT
Section 143(3)

Deputy Commissioner of Income Tax, Madurai vs. Vv Titanium Pigments Private Limited, Tisaiyanvilai

Appeals stand dismissed

ITA 1316/CHNY/2024[2015-16]Status: DisposedITAT Chennai09 Oct 2024AY 2015-16

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37

Deputy Commissioner of Income Tax, Madurai vs. Vv Titanium Pigments Private Limited, Tisaiyanvilai

Appeals stand dismissed

ITA 1315/CHNY/2024[2019-20]Status: DisposedITAT Chennai09 Oct 2024AY 2019-20

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37

Deputy Commissioner of Income Tax, Madurai vs. Vv Titanium Pigments Private Limited, Tisaiyanvilai

Appeals stand dismissed

ITA 1314/CHNY/2024[2018-19]Status: DisposedITAT Chennai09 Oct 2024AY 2018-19

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37

Deputy Commissioner of Income Tax, Madurai vs. Vv Titanium Pigments Private Limited, Tisaiyanvilai

Appeals stand dismissed

ITA 1313/CHNY/2024[2017-18]Status: DisposedITAT Chennai09 Oct 2024AY 2017-18

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37

Deputy Commissioner of Income Tax, Madurai vs. Vv Titanium Pigments Private Limited, Tisaiyanvilai

Appeals stand dismissed

ITA 1312/CHNY/2024[2016-17]Status: DisposedITAT Chennai09 Oct 2024AY 2016-17

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37

V.V. Ttitanium Pigments Pvt. Ltd., Tirunelveli vs. ACIT, CC-2., Madurai

Appeals stand dismissed

ITA 1305/CHNY/2024[2019-20]Status: DisposedITAT Chennai09 Oct 2024AY 2019-20

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37

V.V. Ttitanium Pigments Pvt. Ltd., Tirunelveli vs. ACIT, CC-2, Madurai

Appeals stand dismissed

ITA 1304/CHNY/2024[2018-19]Status: DisposedITAT Chennai09 Oct 2024AY 2018-19

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37

V.V. Ttitanium Pigments Pvt. Ltd., Tirunelveli vs. ACIT, CC-2., Madurai

Appeals stand dismissed

ITA 1303/CHNY/2024[2017-18]Status: DisposedITAT Chennai09 Oct 2024AY 2017-18

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37

V.V. Ttitanium Pigments Pvt. Ltd., Tirunelveli vs. ACIT, CC-2, Madurai

Appeals stand dismissed

ITA 1301/CHNY/2024[2015-16]Status: DisposedITAT Chennai09 Oct 2024AY 2015-16

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1301/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 2. आयकरअपील सं./ Ita No.1302/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 3. आयकरअपील सं./ Ita No.1303/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2017-18) & 4. आयकरअपील सं./ Ita No.1304/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2018-19) & 5. आयकरअपील सं./ Ita No.1305/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2019-20) M/S V.V. Titanium Pigments Pvt.Ltd Acit बनाम/ Mahadevankulam, Keeraikaranthattu Central Circle-2 Vs. Tisayanvillai, Tirunelveli-627 657. Madurai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcv-7723-P (अपीलाथ"/Appellant) : (" थ" / Respondent) & 6. आयकरअपील सं./ Ita No.1316/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2015-16) & 7. आयकरअपील सं./ Ita No.1312/Chny/2024 (िनधा+रण वष+ / Assessment Year: 2016-17) & 8. आयकरअपील सं./ Ita No.1313/Chny/2024

For Appellant: Shri R. Venkata Raman (CA) - Ld. ARFor Respondent: Shri Nilay Baram Som (CIT) -Ld. DR
Section 143(3)Section 153ASection 153DSection 37