Dismissing the appeal of the assesse the Court held that ; since the assessee had failed to establish that the capital assets received were ever part of the firm’s capital account, the deduction claimed under section 14A could not have been allowed and had rightly been disallowed. The Tribunal had recorded a finding that the assessee was a firm and was assessed as a firm. The assessee was not trading in shares and its business was different in nature. The amount which was received as capital assets in the shape of shares were in the names of the partners and did not form part of the capital account of the firm, and therefore, the claim made by the assessee under section 36(1)(iii) read with section14A was not allowable in favour of the partners as, such a deduction could have only been granted to a firm. ( AY. 2001-02)