GODREJ & BOYCE MANUFACTURING CO.LTD. vs DY.COMMR.OF I.T.MUMBAI

The Supreme Court addressed the admissibility of deductions for expenditure incurred in earning dividend income under Section 10(33) of the Income Tax Act, 1961. The Court held that since the appellant had sufficient interest-free funds available for investments, the disallowance of interest expenditure by the Assessing Officer was unjustified. Consequently, the Court ruled in favor of the appellant, allowing the full exemption of dividend income for the Assessment Year 2002-2003.