No section 14A disallowance for personal tax-free investments if business expenditure not disallowed on ground of being for personal purposes

The assessee is maintaining separate books of account for the purpose of business. The tax-free investments are in his personal capacity. As the AO has not disallowed any expenditure of personal nature out of the business income, the expenditure claimed in the business of share dealings cannot be correlated to the incomes earned in personal capacity that too on dividend, PPF interest and tax free interest on RBI bonds. Accordingly, the estimation of expenditure of Rs. 20,000 out of business expenditure as being incurred for earning tax free income is not acceptable.

IN THE INCOME TAX APPELLATE TRIBUNAL

“C” Bench, Mumbai

Before Shri D. Manmohan, Vice President

and Shri B. Ramakotaiah, Accountant Member

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