RAJASTHAN STATE WAREHOUSING CORPN. vs COMMR. OF INCOME TAX

The Supreme Court addressed the interpretation of Section 37 of the Income Tax Act, 1961, regarding the deductibility of expenses incurred by a State Government Corporation. The Court held that expenses attributable to exempt income under Section 10(29) cannot be fully deducted from taxable income, affirming the High Court's decision that the Income Tax Officer's allocation of expenses was correct. The appeal was dismissed, upholding the Tribunal's ruling that only a proportionate share of expenses could be claimed as deductions.