https://www.taxtmi.com/caselaws?id=178511 Where an assessee's net worth was negative throughout the year and its capital was wiped off, exempt investments were treated as financed from borrowed funds, making proportionate interest allocation under rule 8D(2)(ii) the appropriate basis for disallowance under section 14A(1). The contrary claim that past funding should control was rejected. Because the same expenditure was sustained as relatable to exempt income, it was also required to be adjusted while computing book profit under clause (f) of Explanation 1 to section 115JB. The disallowance and corresponding book profit adjustment were both upheld. en-us Mon, 17 Nov 2014 00:00:00 +0530 Mon, 08 Feb 2016 10:07:37 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=178511 Where an assessee's net worth was negative throughout the year and its capital was wiped off, exempt investments were treated as financed from borrowed funds, making proportionate interest allocation under rule 8D(2)(ii) the appropriate basis for disallowance under section 14A(1). The contrary claim that past funding should control was rejected. Because the same expenditure was sustained as relatable to exempt income, it was also required to be adjusted while computing book profit under clause (f) of Explanation 1 to section 115JB. The disallowance and corresponding book profit adjustment were both upheld. Case-Laws Income Tax Mon, 17 Nov 2014 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=178511