CIT v. Walfort Share & Stock Brokers (P.) Ltd.

326 ITR 1Supreme Court of India2010#116 most cited

What is CIT v. Walfort Share & Stock Brokers (P.) Ltd. authority for?

For attracting Section 14A disallowance, there must be a proximate cause relating the expenditure to actual tax-exempt income, and such disallowance is not automatic but requires positive material. Additionally, Section 94(7) on dividend stripping only ignores losses to the extent of dividend received for assessment years post-April 1, 2002, allowing the remaining loss.

543

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2011 to 2026.

Also referred to as

CIT v. Walfort Share & Stock Brokers P. Ltd. · 326 ITR 1 · Section 14A disallowance · proximate cause exempt income · not automatic disallowance · actual exempt income · Section 94(7) · dividend stripping · loss ignored to extent of dividend · tax-exempt income expenditure

Also reported as

192 Taxmann 21141 DTR 233

Sections most often in play

Section 14ASection 143(3)Section 94(7)Section 10(35)Section 133ASection 148Section 148ASection 48
Read the full judgment

Issues it is cited on

section 14a(1)strategic investmentsection 14a(2)section 10(34)disallowance under section 14adisallowance u/s 14asection 14asection 80iamercantile system of accountingsection 115jbsection 115jrevenue expenditure

Judgments citing CIT v. Walfort Share & Stock Brokers (P.) Ltd.

M/S Bharat Cooking Coal Limited, Dhanbad vs. ACIT Cir-1, Dhanbad

In the result, both appeals of revenue and the cross objections of the assessee are dismissed and appeals of assessee in ITA No

ITA 291/RAN/2017[09-10]Status: DisposedITAT Ranchi06 Jan 2026

Bench: Shri George Mathan, Jm & Shri Ratnesh Nandan Sahay, Am आयकर अपील सं./Ita Nos.291,293,294/Ran/2017 (A.Y :2009-10, 2011-12 & 2012-13) M/S Bharat Coking Coal Ltd, Vs. Acit, Circle-1, Dhanbad Finance Directorate, Koyla Bhawan, Koyla Nagar, P.O.Bccl, Township, Dhanbad-826005 स्थायी लेखा सं./Pan No. : Aaacb 7934 M & आयकर अपील सं./Ita Nos.300 & 302/Ran/2017 (A.Y :2009-10 & 2011-12) Acit, Circle-1, Dhanbad Vs. M/S Bharat Coking Coal Ltd, Finance Directorate, Koyla Bhawan, Koyla Nagar, P.O.Bccl, Township, Dhanbad-826005 स्थायी लेखा सं./Pan No. : Acb 7934 M & Cross Objection Nos.09 & 11/Ran/2018 (Arising Out Of Ita Nos.300&302/Ran/2017) (A.Y :2009-10 & 2011-12) M/S Bharat Coking Coal Ltd, Vs. Acit, Circle-1, Dhanbad Finance Directorate, Koyla Bhawan, Koyla Nagar, P.O.Bccl, Township, Dhanbad-826005 स्थायी लेखा सं./Pan No. : Acb 7934 M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्ाारिती की ओर से /Assessee By : Shri M.K.Chowdhary & Shri Devesh Poddar, Advocates राजस्व की ओर से /Revenue By : Shri Rajib Jain, Cit-Dr सुनवाई की तारीख / Date Of Hearing : 06/01/2026 घोषणा की तारीख/Date Of Pronouncement : 06/01/2026 आदेश / O R D E R Per Bench : These Are The Cross Appeals Filed By The Assessee & Revenue Against The Separate Orders Passed By The Ld.Cit(A), Ranchi/Nfac, Delhi, Dated 20.09.2017 & 19.09.2017 For The Assessment Years 2009-10, 2011-

For Appellant: Shri M.K.ChowdharyFor Respondent: Shri Rajib Jain, CIT-DR
Section 32(2)

…to reach the said conclusion namely, in the cases of CIT Vs. HDFC Bank Ltd. reported in [2014] 366 ITR 505 (Bombay), CIT Vs. Hero Cycles Ltd. reported in [2010] 323 ITR 518 (Punjab & Haryana), CIT Vs. Walfort Share & Stock Brokers (P.) Ltd. reported in [2010] 326 ITR 1 (SC) and CIT Vs. Reliance Utilities & Power Ltd. reported in [2009] 313 ITR 340 (Bombay). Considering these facts and the ratio laid down in the various decisions, we are inclined to uphold the order of Ld. CIT(A) wherein it has held that no disallowance is required under rule 8D(2)(ii) by dismissing the ground no. 2 raised by the Revenue. 6 M/s B…

The Pr. Commissioner of Income Tax -Central -1 vs. R.J. Corp. Ltd

The appeal of the assessee is allowed

ITA/743/2025HC Delhi12 Dec 2025

Bench: HON'BLE MR. JUSTICE V. KAMESWAR RAO,HON'BLE MR. JUSTICE VINOD KUMAR

Section 14Section 14A

…visions of Finance BUI, 2001 (Introducing section 14A) as well as the Notes to the Clauses presented along with the said Bill, has been note with approval by the Hon'ble Supreme Court In CIT v. Walfort Share a Stock Brokers (P.) Ltd, [2010] 192 Taxman 211/326 ITR 1 (SO, holding as under: "The insertion of section 14A with retrospective effect is the serious attempt on the part of Parliament not to allow deduction Signed By:PRAMOD KUMAR VATS Signing Date:17.12.2025 17:49:40 Signature Not Verified ITA 743/2025…

Assisstant Commissioner of Income Tax, Mumbai vs. Centrum Retail Services Limited, Mumbai

In the result, the appeal of the revenue bearing ITA No

ITA 5970/MUM/2025[2017-18]Status: DisposedITAT Mumbai14 Nov 2025AY 2017-18

Bench: BEFORESHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. ANIKESH BANERJEE (Judicial Member)

For Appellant: Shri. Virabhadra Mahajan, (SR.DR.)For Respondent: Shri. Ravikant Pathak, CA
Section 115JSection 143(3)Section 14ASection 250

…tion shall be allowable in respect of expenditure incurred in relation to the earning of Income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income Tax vs. Walfort Share and Stock Brokers (P) Ltd (2010) 326 ITR 1.... The mandate of s. 14A is clear. Itdesires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income." 7 Centrum Retail…

ACIT, Mumbai vs. K Raheja Corporate Services Private Limited, Mumbai

In the result, appeal filed by the revenue is hereby dismissed

ITA 5350/MUM/2025[2015-16]Status: DisposedITAT Mumbai31 Oct 2025AY 2015-16

Bench: Shri Vikram Singh Yadav, Am & Ms. Kavitha Rajagopal, Jm

Section 115JSection 143(2)Section 143(3)Section 14ASection 250

…revious year'. Further, it does not account for the concept of 'real income'. It does not note that under Section 5 of the Act, the question of taxation of 'notional income' does not arise. As explained in CIT v. Walfort Share & Stock Brokers (P.) Ltd. /2010] 326 ITR 1 /192 Taxman 211 (SC), the mandate of Section 14A of the Act is to curb the practice of claiming deduction of expenses incurred in relation to exempt income being taxable income and at the same time avail of the tax incentives by way of exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income. Con…

ACIT, Mumbai vs. K Raheja Corporate Services Private Limited, Mumbai

In the result, appeal filed by the revenue is hereby dismissed

ITA 5349/MUM/2025[2014-15]Status: DisposedITAT Mumbai31 Oct 2025AY 2014-15

Bench: Shri Vikram Singh Yadav, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Hemanshu Joshi, SR DR
Section 115JSection 143(2)Section 143(3)Section 14ASection 250

…revious year'. Further, it does not account for the concept of 'real income'. It does not note that under Section 5 of the Act, the question of taxation of 'notional income' does not arise. As explained in CIT v. Walfort Share & Stock Brokers (P.) Ltd. /2010] 326 ITR 1 /192 Taxman 211 (SC), the mandate of Section 14A of the Act is to curb the practice of claiming deduction of expenses incurred in relation to exempt income being taxable income and at the same time avail of the tax incentives by way of exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income. Con…

Indraprastha Gas Limited, Delhi vs. JCIT OSD Range-10, Delhi

In the result, the appeal of the assessee is allowed as above

ITA 2422/DEL/2025[2018-19]Status: DisposedITAT Delhi30 Oct 2025AY 2018-19

Bench: Shri Vijay Pal Rao, Hon’Ble & Shri Avdhesh Kumar Mishra

Section 14ASection 32(1)(iia)

…ons for not accepting the working of the assessee regarding the disallowance made under section 14A of the Act had been given by the Ld. AO. Reliance was placed on the decisions of the Hon’ble Courts in the cases of (i) Walfort Share and Stock Brokers P Ltd.; 326 ITR 1, (ii) Birla 3 Indraprastha Gas Ltd. Corporation Ltd.; [2014] 55 taxman 33, (iii) Development credit Bank Ltd.; [2013] 40 taxman.com 532, (iv) Wella India Hair Cosmetics Pvt Ltd.; [2014] 51 taxman.com 203, (v) Hero Cycle; 323 ITR 518, (vi) Inductis India Pvt. Ltd. 157 taxmann.com 87, (vii) Eichear; 101 TTJ (Del.) 369, (vii) Godrej & Boyce Mfg. Co.…

DCIT, Chennai vs. Thiruvalluvar Textiles Private Limited, Namakkal

In the result, appeals filed by the Revenue are dismissed

ITA 2111/CHNY/2025[2014-15]Status: DisposedITAT Chennai24 Oct 2025AY 2014-15

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

For Appellant: Mr.Saujanya Ranjan, IRSFor Respondent: Mr.Y. Sridhar, FCA
Section 14ASection 36(1)(iii)

…:: 9 :: be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income Tax v. Walfort Share and Stock Brokers (P) Ltd. (2010) 326 ITR 1 ‘…. The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.’ 10. The provisio…

DCIT, Chennai vs. Thiruvalluvar Textiles Private Limited, Namakkal

In the result, appeals filed by the Revenue are dismissed

ITA 2110/CHNY/2025[2013-14]Status: DisposedITAT Chennai24 Oct 2025AY 2013-14

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

For Appellant: Mr.Saujanya Ranjan, IRSFor Respondent: Mr.Y. Sridhar, FCA
Section 14ASection 36(1)(iii)

…:: 9 :: be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income Tax v. Walfort Share and Stock Brokers (P) Ltd. (2010) 326 ITR 1 ‘…. The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.’ 10. The provisio…

DCIT, Mumbai vs. Sanjula Sumati Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 3002/MUM/2025[2019-20]Status: DisposedITAT Mumbai22 Aug 2025AY 2019-20

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

…ment of the Apex Court in McDowell & Co. Ltd. v. Commercial Tax Officer [1985] 22 Taxman 11/154 ITR 148 (SC). Paragraphs 18 and 20 of the judgment of the Apex Court in Commissioner of Income Tax v. Walfort Share & Stock Brokers (P). Ltd. [2010] 192 Taxman 211/326 ITR 1 (SC) read as under : 18. The next point which arises for determination is whether the "loss" pertaining to exempted income was deductible against the chargeable income. In other words, whether the loss in the sale of units could be disallowed on the ground that the impugned transaction was a transaction of dividend stripping. The AO in the present…

DCIT, Mumbai vs. Sanjula Sumati Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 3001/MUM/2025[2018-19]Status: DisposedITAT Mumbai22 Aug 2025AY 2018-19

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

…ment of the Apex Court in McDowell & Co. Ltd. v. Commercial Tax Officer [1985] 22 Taxman 11/154 ITR 148 (SC). Paragraphs 18 and 20 of the judgment of the Apex Court in Commissioner of Income Tax v. Walfort Share & Stock Brokers (P). Ltd. [2010] 192 Taxman 211/326 ITR 1 (SC) read as under : 18. The next point which arises for determination is whether the "loss" pertaining to exempted income was deductible against the chargeable income. In other words, whether the loss in the sale of units could be disallowed on the ground that the impugned transaction was a transaction of dividend stripping. The AO in the present…

DCIT, Mumbai vs. Lalita Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 3000/MUM/2025[2019-20]Status: DisposedITAT Mumbai22 Aug 2025AY 2019-20

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

…ment of the Apex Court in McDowell & Co. Ltd. v. Commercial Tax Officer [1985] 22 Taxman 11/154 ITR 148 (SC). Paragraphs 18 and 20 of the judgment of the Apex Court in Commissioner of Income Tax v. Walfort Share & Stock Brokers (P). Ltd. [2010] 192 Taxman 211/326 ITR 1 (SC) read as under : 18. The next point which arises for determination is whether the "loss" pertaining to exempted income was deductible against the chargeable income. In other words, whether the loss in the sale of units could be disallowed on the ground that the impugned transaction was a transaction of dividend stripping. The AO in the present…

DCIT, Mumbai vs. Kanta Ganpatlal Kothari, Mumbai

In the result, all appeals filed by the Revenue stands

ITA 2999/MUM/2025[2019-20]Status: DisposedITAT Mumbai22 Aug 2025AY 2019-20

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

…ment of the Apex Court in McDowell & Co. Ltd. v. Commercial Tax Officer [1985] 22 Тахтап 11/154 ITR 148 (SC). Paragraphs 18 and 20 of the judgment of the Apex Court in Commissioner of Income Tax v. Walfort Share & Stock Brokers (P). Ltd. [2010] 192 Тахтап 211/326 ITR 1 (SC) read as under : 18. The next point which arises for determination is whether the "loss" pertaining to exempted income was deductible against the chargeable income. In other words, whether the loss in the sale of units could be disallowed on the ground that the impugned transaction was a transaction of dividend stripping. The AO in the present…

DCIT, Mumbai vs. Kanta Ganpatlal Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 2998/MUM/2025[2018-19]Status: DisposedITAT Mumbai22 Aug 2025AY 2018-19

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

…ment of the Apex Court in McDowell & Co. Ltd. v. Commercial Tax Officer [1985] 22 Taxman 11/154 ITR 148 (SC). Paragraphs 18 and 20 of the judgment of the Apex Court in Commissioner of Income Tax v. Walfort Share & Stock Brokers (P). Ltd. [2010] 192 Taxman 211/326 ITR 1 (SC) read as under : 18. The next point which arises for determination is whether the "loss" pertaining to exempted income was deductible against the chargeable income. In other words, whether the loss in the sale of units could be disallowed on the ground that the impugned transaction was a transaction of dividend stripping. The AO in the present…

DCIT, Mumbai vs. Anita Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 2996/MUM/2025[2018-19]Status: DisposedITAT Mumbai22 Aug 2025AY 2018-19

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

…ment of the Apex Court in McDowell & Co. Ltd. v. Commercial Tax Officer [1985] 22 Taxman 11/154 ITR 148 (SC). Paragraphs 18 and 20 of the judgment of the Apex Court in Commissioner of Income Tax v. Walfort Share & Stock Brokers (P). Ltd. [2010] 192 Taxman 211/326 ITR 1 (SC) read as under : 18. The next point which arises for determination is whether the "loss" pertaining to exempted income was deductible against the chargeable income. In other words, whether the loss in the sale of units could be disallowed on the ground that the impugned transaction was a transaction of dividend stripping. The AO in the present…

DCIT, Mumbai vs. Lalita Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 2990/MUM/2025[2018]Status: DisposedITAT Mumbai22 Aug 2025

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

…ment of the Apex Court in McDowell & Co. Ltd. v. Commercial Tax Officer [1985] 22 Taxman 11/154 ITR 148 (SC). Paragraphs 18 and 20 of the judgment of the Apex Court in Commissioner of Income Tax v. Walfort Share & Stock Brokers (P). Ltd. [2010] 192 Taxman 211/326 ITR 1 (SC) read as under : 18. The next point which arises for determination is whether the "loss" pertaining to exempted income was deductible against the chargeable income. In other words, whether the loss in the sale of units could be disallowed on the ground that the impugned transaction was a transaction of dividend stripping. The AO in the present…

DCIT, Mumbai vs. Anita Kothari, Mumbai

In the result, all appeals filed by the Revenue stands dismissed

ITA 2988/MUM/2025[2019-20]Status: DisposedITAT Mumbai22 Aug 2025AY 2019-20

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 10(35)Section 133A

…ment of the Apex Court in McDowell & Co. Ltd. v. Commercial Tax Officer [1985] 22 Taxman 11/154 ITR 148 (SC). Paragraphs 18 and 20 of the judgment of the Apex Court in Commissioner of Income Tax v. Walfort Share & Stock Brokers (P). Ltd. [2010] 192 Taxman 211/326 ITR 1 (SC) read as under : 18. The next point which arises for determination is whether the "loss" pertaining to exempted income was deductible against the chargeable income. In other words, whether the loss in the sale of units could be disallowed on the ground that the impugned transaction was a transaction of dividend stripping. The AO in the present…

DCIT, Mumbai vs. 2015 Grover Family Trust, Mumbai

In the result, both the appeals of the Revenue are dismissed

ITA 5108/MUM/2024[2016-17]Status: DisposedITAT Mumbai12 Aug 2025AY 2016-17

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 133ASection 143(3)Section 147Section 94(7)(E)

…ot the case of the AO that the assessee has violated the provisions of section 94(7) of the Act. In this regard, Id. CIT(A) has relied upon the CBDT Circular No.14/2001 and decision of Supreme Court in the case of Walfort Share & Stock Brokers (P) Ltd. (2010) 41 DTR 233 (SC). (iv) Ld.CIT(A) observed that assessee is a regular investor in shares and securities including the mutual funds. Ld.CIT(A) noted that in the same year, assessee has also incurred losses of Rs.7,25,636/-in BOI AXA Equity Mutual Fund which has not been doubted by the AO. Further, LD.CIT(A) also noted that assessee has received dividend of Rs.…

DCIT, Mumbai vs. Cms Computers Limited, Mumbai

In the result, both the appeals of the Revenue are dismissed

ITA 5105/MUM/2024[2016-17]Status: DisposedITAT Mumbai12 Aug 2025AY 2016-17

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 133ASection 143(3)Section 147Section 94(7)(E)

…ot the case of the AO that the assessee has violated the provisions of section 94(7) of the Act. In this regard, Id. CIT(A) has relied upon the CBDT Circular No.14/2001 and decision of Supreme Court in the case of Walfort Share & Stock Brokers (P) Ltd. (2010) 41 DTR 233 (SC). (iv) Ld.CIT(A) observed that assessee is a regular investor in shares and securities including the mutual funds. Ld.CIT(A) noted that in the same year, assessee has also incurred losses of Rs.7,25,636/-in BOI AXA Equity Mutual Fund which has not been doubted by the AO. Further, LD.CIT(A) also noted that assessee has received dividend of Rs.…

Deputy Commissioner of Income Tax, Chennai vs. Ashok Leyland Limited, Chennai

In the result, appeal filed by the assessee is partly allowed and the

ITA 1663/CHNY/2024[2019-20]Status: DisposedITAT Chennai07 Jul 2025AY 2019-20

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

For Appellant: Mr.R. VijayaraghavanFor Respondent: Ms.Ann Marry Baby, CIT
Section 14ASection 92C

…tion shall be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income-tax v. Walfort Share and Stock Brokers (P) Ltd. [2010] 326 ITR 1 '.... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.' 10. The provis…

Ashok Leyland Limited, Chennai vs. DCIT Non Corp Circle 8(1) Ltu - II, Chennai

ITA 1402/CHNY/2024[2019-20]Status: DisposedITAT Chennai07 Jul 2025AY 2019-20

Bench: Shri Aby T. Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita No.1402/Chny/2024 निर्धारण वर्ष/Assessment Year: 2019-20 M/S. Ashok Leyland Ltd., No.1, Sardar Patel Road, Guindy, Chennai-600 032. [Pan: Aaaса 4651 L] (अपीलार्थी/Appellant) V. The Dcit, Ncc-8(1), Ltu-Ii, Chennai. (प्रत्यर्थी/Respondent) आयकर अपील सं./Ita No.1663/Chny/2024 निर्धारण वर्ष/Assessment Year: 2019-20 The Dcit, Ncc-8, Chennai. (अपीलार्थी/Appellant) V. M/S. Ashok Leyland Ltd., No.1, Sardar Patel Road, Guindy, Chennai-600 032. [Pan: Aaaса 4651 L] (प्रत्यर्थी/Respondent) Assessee By : Mr.R. Vijayaraghavan, Advocate Department By : Ms.Ann Marry Baby, Cit सुनवाईकीतारीख/Date Of Hearing : 04.06.2025 घोषणाकीतारीख /Date Of Pronouncement : 07.07.2025 आदेश / Order Per Aby T. Varkey, Jm: These Are Cross-Appeals Preferred By The Assessee As Well As The Revenue Against The Order Of The Learned Commissioner Of Income Tax

For Appellant: Mr.R. Vijayaraghavan, AdvocateFor Respondent: Ms.Ann Marry Baby, CIT
Section 14ASection 92C

…tion shall be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income-tax v. Walfort Share and Stock Brokers (P) Ltd. [2010] 326 ITR 1 '.... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.' 10. The provisio…