https://www.taxtmi.com/caselaws?id=59425 Where tax-free bond transactions are genuine, the actual loss on sale cannot be denied merely because the interest earned on those bonds is exempt; the cost of acquisition includes accrued interest paid up to purchase, and a lower sale price does not by itself justify disallowance of the loss. However, expenditure incurred in relation to exempt income remains disallowable, and where borrowed funds or related financing are not satisfactorily shown to be unconnected with the tax-free bond investment, a proportionate allocation of interest and administrative to the exempt-income stream is warranted. The loss claim was allowed, while the related expenditure disallowance was upheld. en-us Thu, 11 Mar 2004 00:00:00 +0530 Wed, 17 Jul 2024 17:01:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=59425 Where tax-free bond transactions are genuine, the actual loss on sale cannot be denied merely because the interest earned on those bonds is exempt; the cost of acquisition includes accrued interest paid up to purchase, and a lower sale price does not by itself justify disallowance of the loss. However, expenditure incurred in relation to exempt income remains disallowable, and where borrowed funds or related financing are not satisfactorily shown to be unconnected with the tax-free bond investment, a proportionate allocation of interest and administrative to the exempt-income stream is warranted. The loss claim was allowed, while the related expenditure disallowance was upheld. Case-Laws Income Tax Thu, 11 Mar 2004 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=59425