https://www.taxtmi.com/caselaws?id=5772 The SC held that the disallowance was not for non-compliance with s.37(1) but because the expenditure was incurred in earning exempt income; where an assessee's activities constitute one indivisible business, expenditure incurred for the business is fully deductible even if some ventures yield exempt receipts, and apportionment is unjustified. The Court set out principles: deductions allowable under each head despite exempt income elsewhere; when different items under a head yield taxable versus exempt income, permissible expenditure for that head is deductible in full; and for multiple ventures, s.37 allowability depends on statutory requirements and whether the ventures form one indivisible business. en-us Wed, 23 Feb 2000 00:00:00 +0530 Wed, 08 Oct 2025 11:32:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5772 The SC held that the disallowance was not for non-compliance with s.37(1) but because the expenditure was incurred in earning exempt income; where an assessee's activities constitute one indivisible business, expenditure incurred for the business is fully deductible even if some ventures yield exempt receipts, and apportionment is unjustified. The Court set out principles: deductions allowable under each head despite exempt income elsewhere; when different items under a head yield taxable versus exempt income, permissible expenditure for that head is deductible in full; and for multiple ventures, s.37 allowability depends on statutory requirements and whether the ventures form one indivisible business. Case-Laws Income Tax Wed, 23 Feb 2000 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5772