https://www.taxtmi.com/caselaws?id=357102 The SC held that Section 14A applies based on apportionment theory, not dominant purpose test, when determining expenditure disallowance for non-taxable dividend income. Where shares are held as investment (including for controlling interest), expenditure attributable to dividend income must be disallowed regardless of investment purpose. However, when shares are held as stock-in-trade for trading profits, different considerations apply. The provision is retrospective to 1962, but Rule 8D is prospective from 2007. AO must record satisfaction before applying apportionment theory and examine loan nature for share purchases. en-us Mon, 12 Feb 2018 00:00:00 +0530 Thu, 19 Jun 2025 14:42:30 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=357102 The SC held that Section 14A applies based on apportionment theory, not dominant purpose test, when determining expenditure disallowance for non-taxable dividend income. Where shares are held as investment (including for controlling interest), expenditure attributable to dividend income must be disallowed regardless of investment purpose. However, when shares are held as stock-in-trade for trading profits, different considerations apply. The provision is retrospective to 1962, but Rule 8D is prospective from 2007. AO must record satisfaction before applying apportionment theory and examine loan nature for share purchases. Case-Laws Income Tax Mon, 12 Feb 2018 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=357102