https://www.taxtmi.com/caselaws?id=412221 The SC ruled in favor of assessee banks regarding disallowance under Section 14A for investments in tax-free bonds/securities. The court held that proportionate disallowance of interest is not warranted when banks have sufficient interest-free own funds exceeding their investments in tax-free securities. The revenue failed to establish nexus between expenditure disallowed and earning of exempt income, and could not demonstrate any statutory obligation requiring separate account maintenance. The court agreed with ITAT's favorable view for assessees, concluding no tax implication arises without proven connection between disallowed expenditure and exempt income generation. en-us Thu, 09 Sep 2021 00:00:00 +0530 Wed, 07 May 2025 16:58:30 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=412221 The SC ruled in favor of assessee banks regarding disallowance under Section 14A for investments in tax-free bonds/securities. The court held that proportionate disallowance of interest is not warranted when banks have sufficient interest-free own funds exceeding their investments in tax-free securities. The revenue failed to establish nexus between expenditure disallowed and earning of exempt income, and could not demonstrate any statutory obligation requiring separate account maintenance. The court agreed with ITAT's favorable view for assessees, concluding no tax implication arises without proven connection between disallowed expenditure and exempt income generation. Case-Laws Income Tax Thu, 09 Sep 2021 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=412221