https://www.taxtmi.com/caselaws?id=342665 Section 14A was held to cover dividend income exempt in the recipient's hands because tax is paid by the distributing company under s.115-O (and similarly under s.115-R for mutual fund distributions); such income "does not form part of total income," and allowing related expenditure would be incongruous with the exemption scheme, so expenditure incurred to earn such dividend is disallowable, and this issue was decided against the assessee. On application of s.14A(2)-(3) read with r.8D, the SC held that disallowance can be computed by the prescribed method only after the AO records dissatisfaction, on scrutiny of accounts, with the assessee's claim; absent recorded reasons or changed circumstances from earlier years, no disallowance could be made for the year in question, and this issue was decided in favour of the assessee. en-us Mon, 08 May 2017 00:00:00 +0530 Thu, 18 Dec 2025 13:08:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=342665 Section 14A was held to cover dividend income exempt in the recipient's hands because tax is paid by the distributing company under s.115-O (and similarly under s.115-R for mutual fund distributions); such income "does not form part of total income," and allowing related expenditure would be incongruous with the exemption scheme, so expenditure incurred to earn such dividend is disallowable, and this issue was decided against the assessee. On application of s.14A(2)-(3) read with r.8D, the SC held that disallowance can be computed by the prescribed method only after the AO records dissatisfaction, on scrutiny of accounts, with the assessee's claim; absent recorded reasons or changed circumstances from earlier years, no disallowance could be made for the year in question, and this issue was decided in favour of the assessee. Case-Laws Income Tax Mon, 08 May 2017 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=342665