https://www.taxtmi.com/caselaws?id=792914 Ex gratia provision for employees was treated as an ascertained business liability where it was backed by board approval, followed mercantile accounting, and was substantially paid soon after, so the deduction was allowed. Disallowance under section 14A read with Rule 8D failed because the Assessing Officer had not recorded satisfaction, on the basis of the accounts, that the assessee's claim of no exempt-income expenditure was incorrect, so the addition was deleted. Expenditure to increase authorised share capital was held capital in nature and outside section 35D, so the disallowance was sustained. Penalty under section 271(1)(c) was deleted because the underlying issue was debatable and the quantum appeal had been admitted by the High Court. en-us Wed, 03 Jun 2026 00:00:00 +0530 Fri, 05 Jun 2026 08:07:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=792914 Ex gratia provision for employees was treated as an ascertained business liability where it was backed by board approval, followed mercantile accounting, and was substantially paid soon after, so the deduction was allowed. Disallowance under section 14A read with Rule 8D failed because the Assessing Officer had not recorded satisfaction, on the basis of the accounts, that the assessee's claim of no exempt-income expenditure was incorrect, so the addition was deleted. Expenditure to increase authorised share capital was held capital in nature and outside section 35D, so the disallowance was sustained. Penalty under section 271(1)(c) was deleted because the underlying issue was debatable and the quantum appeal had been admitted by the High Court. Case-Laws Income Tax Wed, 03 Jun 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=792914