Business expenditure

Article I.                    Disallowance under s 40(a)(ia) — Provision of s 40(a)(ia) can be invoked only in the event of non-deduction of tax but not for lesser deduction of tax — as held by KolTrib in DCIT v S K Tekriwal — In favour of: The assessee.

Article II.                 Provisions for warranty based on scientific study and calculated on the basis of actuarial and past history of case is allowable — as held by DelTrib in Eicher Motors Limited v Dy CIT — In favour of: The revenue (Partly).

Disallowance under s 14A — Where the assessee fails to prove that no borrowed fund was utilised for investment in assets which generated tax-free income, disallowance made under s 14A is justified.