For administrative expenditure disallowance under section 14A,...

For administrative expenditure disallowance under section 14A, recorded dissatisfaction with the taxpayer's calculation is required. The investment base includes investments yielding exempt dividend or tax-free interest and those capable of yielding exempt dividends, but the disallowance cannot exceed exempt income. Sufficient interest-free funds support a presumption that investments were made from those funds where use of borrowed funds is not established. Demurrage paid to non-resident iron ore buyers and export commission paid to non-residents without a permanent establishment in India do not require tax deduction at source. Ship repairs and public-road work that create no new asset or enduring benefit qualify as revenue expenditure. Additional depreciation applies to mining plant and machinery. Where only half is allowed for plant and machinery acquired in the second half of the preceding year, the balance may be claimed in the succeeding year. Profits from securities held as investments are capital gains.