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

Income Tax Officer, Lucknow vs. Cpf Picup Trust, Lucknow

In the result, the appeal of the Department is dismissed

ITA 461/LKW/2025[2020-21]Status: DisposedITAT Lucknow15 May 2026AY 2020-21

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2020-21 Income Tax Officer Vs. Cpf Picup Trust, Picup Bhawan, Vibhuti Khand, Gomti Nagar-226010 Pan: Aaatc3437D (Appellant) (Respondent) Assessee By: Sh. Siddharth Kohli, Adv Revenue By: Sh. R.R.N. Shukla, Addl Cit Dr Date Of Hearing: 26.02.2026 Date Of Pronouncement: 15.05.2026 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Department Against The Orders Of The Ld. Cit(A), Nfac, Allowing The Appeal Of The Assessee Against The Orders Of The Assessing Officer Passed Under Section 143(3) R.W.S. 144B Of The Income Tax Act For The Assessment Year 2020-21, On 31.08.2022. The Grounds Of Appeal Are As Under:- “1. Because Of The Facts & Circumstances Of The Ld. Cit (A) Has Erred In Law & On Facts In Dealing The Addition 2.457/- Made By The Ao On Account Of Disallowance At Deduction U/S 57, Where The Addition Is Due To The Fact That In Reply, The Assessee Merely Submitted A Copy Of Income & Expenditure Account & Balance Sheet Which Was Already Filed With The Itr. However, No Further Details Called To In Respect Of The Details Of The Large Deduction U/S 57 Amounting To Rs 2.55 157/- Were Filed Further, A Show Cause Notice Dated 26/07/2022 Was Issued To Assessee, Through Which The Assessee Was Required To Submit Details & Explanation. Despite Adequate Opportunities Cited Above, The Assessee Failed To Submit The Requisite Details In Support Of Its Claim Of Deductions U/S 57 Claimed In The 11 Amounting Rs. 2,55,82,15 Hence, The Deduction U/S 57 Of The It Act, 1961 Of Rs. 2,55,82,457/ Claimed By The Assessee In The Itr Of A.Y.2020-21 Was Hereby Disallowed & Added Back To The Total Income Of The Assessee. 2. That The Order Of Cit(A), Being Erroneous In Law & In Fact Be Cancelled & Order Of Ao Be Restored.

For Appellant: Sh. Siddharth Kohli, AdvFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR
Section 143(3)Section 57

Assistant Commissioner of Income Tax Circle-1, Lucknow vs. Rakesh Gupta HUF, Lucknow

In the result, the appeal of the Revenue is dismissed

ITA 335/LKW/2024[2018 - 19]Status: DisposedITAT Lucknow27 Apr 2026

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2018-19 Assistant Commissioner Of Income Vs. Rakesh Gupta Huf, Tax, Circle-1, Lucknow, Lucknow Lucknow Pan: Aalhr7070L (Appellant) (Respondent) Assessee By: Sh. Rakesh Garg, Advocate Revenue By: Sh. R.K. Agarwal, Cit Dr Date Of Hearing: 28.01.2026 Date Of Pronouncement: 27.04.2026 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Revenue Against The Orders Of The Ld. Cit(A), Nfac Under Section 250 Of The Income Tax Act Dated 24.02.2024, Wherein The Ld. Cit(A) Has Partly Allowed The Appeals Of The Assessee Against The Orders Of The Assessing Officer, Passed Under Section 143(3) For The Assessment Year 2018-19 On 15.04.2021. The Grounds Of Appeal Are As Under:- “1. The Ld. Cit(A) Erred By Deleting The Addition Of Rs. 16,69,47,753/- Made Pertaining To The Issue Of Unsecured Loan During The Course Of Assessment Proceedings Assessee Failed To Explain The Issue Of Unsecured Loan. There Was Increase Of Unsecured Loan During The F.Y. 2017-18 Relevant To A.Y. 2018-19 To The Tune Of Rs. 16,69,47,753/-. 2. The Ld. Cit(A) Erred By Not Considering The Facts That The Assessee Failed To Provide The Identity Of Lender Of Unsecured Loan & Their Creditworthiness During The Course Of The Assessment Proceedings. Accordingly The Amount To The Tune Of Rs 16,69,47,753/-Has Been Determined As Unexplained Credit U/S 68 Of The 1.T. Act. 3. The Ld. Cit(A) Erred In Deleting The Addition Of 1,16,92,894/- Made U/S 57 Of The 1.T. Act, 1961. The Assessee Failed To Substantiate That Expenses Inade To The Tune Of Rs. 1,97,76,088/- Were Made Wholly & Exclusively For The Purpose Of 1 A.Y. 2018-19

For Appellant: Sh. Rakesh Garg, AdvocateFor Respondent: Sh. R.K. Agarwal, CIT DR
Section 143(3)Section 148Section 148ASection 148A(1)Section 148A(3)Section 149Section 250Section 57Section 68