Exempt-income expenditure disallowance is confined to investments that actually generated exempt income, while supported business expenses remain deductible.

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....Expenditure relating to exempt income is discussed as being disallowable under section 14A read with Rule 8D only by reference to investments that actually generated exempt income during the relevant year; the computation was restricted accordingly. Corporate social responsibility expenditure incurred by a statutory port authority under Ministry guidelines is treated as deductible where the Companies Act exclusion does not apply and earlier-year treatment was consistent. Payments to meet an actuarially certified superannuation-fund deficit are distinguished from ordinary annual contributions subject to Rule 87 limits. Software expenditure supported by invoices, banking payments and tax deduction evidence is treated as genuine despite the payee's non-compliance. Accrued expenses recorded under the prescribed accrual-accounting framework are treated as ascertained liabilities.....