https://www.taxtmi.com/caselaws?id=66694 The Tribunal dismissed the appeal, affirming the disallowance of the interest expenditure of Rs. 5,69,739 as a deduction. It held that the interest paid on borrowed capital for acquiring shares was only deductible when dividend income was taxable. With dividend income now exempt under section 10(33), the interest is not allowable, as it pertains to non-taxable income. The Tribunal clarified that tax paid by the company under section 115-O does not render the dividend taxable for shareholders, and the interest expenditure cannot be reallocated to other income categories or future capital gains. The decision was based on the provisions of section 14A. en-us Wed, 04 Aug 2004 00:00:00 +0530 Tue, 02 Jul 2024 12:44:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=66694 The Tribunal dismissed the appeal, affirming the disallowance of the interest expenditure of Rs. 5,69,739 as a deduction. It held that the interest paid on borrowed capital for acquiring shares was only deductible when dividend income was taxable. With dividend income now exempt under section 10(33), the interest is not allowable, as it pertains to non-taxable income. The Tribunal clarified that tax paid by the company under section 115-O does not render the dividend taxable for shareholders, and the interest expenditure cannot be reallocated to other income categories or future capital gains. The decision was based on the provisions of section 14A. Case-Laws Income Tax Wed, 04 Aug 2004 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=66694