Section 57 of the Income Tax Act

Income-tax Act, 2025: s.93

Section 57 of the Income-tax Act, 1961 corresponds to section 93 (Deductions) of the Income-tax Act, 2025.

Read section 93 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 57 is CIT v. Andhra Pradesh State (200 Taxmann 220), cited in 348 of the 1,225 judgments on BharatTax that turn on this section.

Leading authorities on Section 57

CIT v. Andhra Pradesh State
200 Taxmann 220 · 2011 · High Court
348
citing judgments

Interest earned by a Co-operative Society from investing fixed deposits in banks is entitled to a deduction under Section 80P(2)(a)(i) of the Income-tax Act.

Kerala State Co-operative Agricultural and Rural Development Bank Ltd. v. Assessing Officer
154 Taxmann.com 305 · 2023 · Supreme Court
136
citing judgments

Section 80P(4) is not applicable to a cooperative bank unless it is classified as a 'bank' under the provisions of the Banking Regulation Act, 1949. For cooperative banks not meeting this definition, the deduction for interest earned from investments in cooperative societies is available under Section 80P(2)(d) of the Income-tax Act.

CIT v. Bankipur Club Ltd.
226 ITR 97 · 1997 · Supreme Court
125
citing judgments

The doctrine of mutuality applies only when there is complete identity between the contributors to a common fund and the participants in its surplus. Income received from non-members or distinct classes of members who do not share this identity is not covered by mutuality and is taxable.

Totgars Co-operative Sale Society Ltd. v. ITO
58 Taxmann.com 35 · 2015 · High Court
114
citing judgments

When a co-operative society earns interest on deposits with scheduled banks, this income is assessable under "Income from other sources" (Section 56), and the society is entitled to deduct related administrative and proportionate expenses under Section 57 to tax only the net interest income.

CIT v. Karnataka State Co-operative Apex Bank
251 ITR 194 · 2001 · Supreme Court
106
citing judgments

Interest income earned by a co-operative bank from statutory investments or mandatory deposits, which are essential for conducting its banking business, qualifies as business income and is exempt under Section 80P(2)(a)(i) of the Income-tax Act.

CIT v. V.P. Gopinathan
248 ITR 449 · 2001 · Supreme Court
66
citing judgments

Interest paid on a loan taken against the security of a fixed deposit cannot be set off against or reduced from the interest income earned on that fixed deposit. The Income-tax Act does not permit such netting.

79 Taxman 378/216 ITR 548 (Bom.) 4. CIT v. Macbrout Engineering (P.) Ltd.
52 Taxmann.com 219 · 2014 · High Court
43
citing judgments

If the Revenue accepts the Tribunal's decision for earlier years without challenge, it cannot assail the same decision in subsequent years, provided the facts are similar.

Seth R. Dalmia v. CIT
110 ITR 644 · 1977 · Supreme Court
40
citing judgments

An indirect connection between expenditure and income can be sufficient to establish the required nexus for deductibility under Section 57(iii). The connection need not be direct.

254(2) of the Act. In Honda Siel Power Products Ltd. v. CIT
295 ITR 466 · 2007 · Supreme Court
35
citing judgments

A mistake apparent from the record that prejudices a party is rectifiable under section 254(2) of the Act.

Cartini India Ltd. v. Addl. CIT & Anr.
314 ITR 275 · 2009 · High Court
34
citing judgments

Reopening an assessment based on a mere change of opinion, without any tangible material, is invalid. The Assessing Officer cannot withdraw an issue after considering the assessee's reply and then re-open the case on the same grounds.

Judgments on Section 57

Vijay Nanalal Shah, Surat vs. DCIT, Circle-1(1)(1), Surat

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

ITA 505/SRT/2026[2013-14]Status: DisposedITAT Surat24 Jul 2026AY 2013-14

Bench: Dr. Arjun Lal Sainiआयकरअपीलसं./Ita No.505/Srt/2026 [ "नधा"रणवष"/Assessment Year: 2013-14 ] Vijay Nanalal Shah, Deputy Commissioner Of Income- Vs. 33/A, C/O. Evershine Marbles, Tax, Circle-1 (1) (1), Surat, Bhatar Char Rasta, Udhna Income Tax Office, Majura Gate, Magdalla Road, Surat, Surat, Gujarat-395002 Gujarat-395017 "ायीलेखासं./जीआइआरसं./Pan/Gir No.: Alnps6079D (अपीलाथ"/Assessee) (""यथ"/Respondent) Assessee By : Shri Kiran K Shah, Ar Respondent By : Shri Ajay Uke, Ld. Sr. Dr Date Of Hearing : 18/05/2026 24/07/2026 Date Of Pronouncement : :: Order :: Per, Dr. Arjun Lal Saini, Am: Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year (Ay) 2013-14, Is Directed Against The Order Passed Under Section 250 Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Dated 24.02.2026 By The National Faceless Appeal Centre (Nfac), Delhi/Commissioner Of Income Tax (Appeals) [In Short ‘Ld.Cit(A)’] Which In Turn Arises Out Of An Assessment Order Passed By The Assessing Officer U/S. 143(3) Of The Act Dated 21.03.2016. 2. The Grounds Of Appeal Raised By The Assessee Are As Follows: 1. The Learned Cit (A) Grossly Erred In Confirming Addition Of Rs.2,31,506/- On Account Of Disallowance Of Interest As Discussed In Para 6 Of The Appeal Order. The Assessee Reserves Right To Add, Alter & Withdraw Any Grounds Of Appeal. 2. Vijay N. Shah

For Appellant: Shri Kiran K Shah, ARFor Respondent: Shri Ajay Uke, Ld. Sr. DR
Section 143(3)Section 250Section 57