https://www.taxtmi.com/caselaws?id=465508 Disallowance of interest under s.36(1)(iii) turned on whether borrowed funds were diverted to non-business investments. The Tribunal held the AO made no finding linking equity investments to borrowings, and the assessee established the investments were strategic and made on grounds of commercial expediency yielding business advantage; hence s.36(1)(iii) could not be invoked and the Revenue's ground failed. Disallowance under s.14A r.w. Rule 8D was confined to exempt dividend income, consistent with SC/HC authority that disallowance cannot exceed exempt income; the restriction was upheld. An ad hoc disallowance of 20% of "unproved" sundry creditors was deleted because most confirmations were filed and the AO gave no cogent basis for an arbitrary percentage. ROC fees for increase in authorised share capital were treated as capital expenditure and disallowed. en-us Wed, 05 Jun 2024 00:00:00 +0530 Mon, 29 Dec 2025 12:40:51 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=465508 Disallowance of interest under s.36(1)(iii) turned on whether borrowed funds were diverted to non-business investments. The Tribunal held the AO made no finding linking equity investments to borrowings, and the assessee established the investments were strategic and made on grounds of commercial expediency yielding business advantage; hence s.36(1)(iii) could not be invoked and the Revenue's ground failed. Disallowance under s.14A r.w. Rule 8D was confined to exempt dividend income, consistent with SC/HC authority that disallowance cannot exceed exempt income; the restriction was upheld. An ad hoc disallowance of 20% of "unproved" sundry creditors was deleted because most confirmations were filed and the AO gave no cogent basis for an arbitrary percentage. ROC fees for increase in authorised share capital were treated as capital expenditure and disallowed. Case-Laws Income Tax Wed, 05 Jun 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=465508