The assessee being a partner in a Partnership Firm had received a share of loss from the firm during the year under consideration. The AO invoked disallowance under section 14A of the Act. On appeal, the CIT(A) confirmed the disallowance by holding that even though the Partnership Firm returned a loss, it was a case of negative income and not Nil income. On further appeal, the Hon’ble Tribunal held that there is no qualitative difference between two situations, first, where the exempt income is Nil and second, where there is negative income for the year. It was also held that the assessee has not earned any exempt income during the year and therefore no disallowance can be made. Reliance in this regard was made on the decision of Hon’ble Bombay High Court in the case of Pr. CIT v. HSBC Invest Direct (India) Ltd. (2020) 421 ITR 125 (Bom.)(HC). (AY.2013-14)