https://www.taxtmi.com/caselaws?id=798668 Interest expenditure cannot be disallowed on an ad hoc or estimated basis unless a nexus is established between interest-bearing borrowings and their diversion for non-business purposes. Current business assets exceeding working-capital borrowings, coupled with the absence of identified non-business investments, interest-free advances, related-party loans, or withdrawals, does not support such a disallowance. Section 14A read with Rule 8D applies only where exempt income is earned or receivable in the relevant previous year. Investments capable of generating exempt income in future do not justify disallowance, and any disallowance where exempt income arises cannot exceed that income. en-us Thu, 20 Aug 2026 00:00:00 +0530 Thu, 10 Sep 2026 08:51:23 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=798668 Interest expenditure cannot be disallowed on an ad hoc or estimated basis unless a nexus is established between interest-bearing borrowings and their diversion for non-business purposes. Current business assets exceeding working-capital borrowings, coupled with the absence of identified non-business investments, interest-free advances, related-party loans, or withdrawals, does not support such a disallowance. Section 14A read with Rule 8D applies only where exempt income is earned or receivable in the relevant previous year. Investments capable of generating exempt income in future do not justify disallowance, and any disallowance where exempt income arises cannot exceed that income. Case-Laws Income Tax Thu, 20 Aug 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=798668