https://www.taxtmi.com/caselaws?id=60374 ITAT (Cal) allowed Revenue's appeal, set aside the CIT(A) order and restored the AO. The tribunal held that where borrowed funds are used to acquire shares held as investments (or even as trading/business assets), proportionate interest attributable to earning exempt dividend income must be apportioned against that exempt income under s.14A and related provisions, not fully deducted from taxable business income under s.36(1)(iii). The AO's disallowance of pro rata interest against taxable income and appropriation against exempt dividend was held justified and the assessment is to be modified accordingly. en-us Thu, 29 May 2003 00:00:00 +0530 Fri, 26 Sep 2025 18:11:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=60374 ITAT (Cal) allowed Revenue's appeal, set aside the CIT(A) order and restored the AO. The tribunal held that where borrowed funds are used to acquire shares held as investments (or even as trading/business assets), proportionate interest attributable to earning exempt dividend income must be apportioned against that exempt income under s.14A and related provisions, not fully deducted from taxable business income under s.36(1)(iii). The AO's disallowance of pro rata interest against taxable income and appropriation against exempt dividend was held justified and the assessment is to be modified accordingly. Case-Laws Income Tax Thu, 29 May 2003 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=60374