Section 14a disallowance

Expenditure will be disallowed only if nexus is proved to earning of exempt income. Merely earning income from investments does not give base to disallow expenses. However, costs such as any brokerage paid to transact in shares, holding costs, etc. may be disallowed. Further, Investment in subsidiary is no base to disallow expenses. 

Thank you for wothful replies !!

Further I want to know whether Long Term Capital Gain(on Which STT is paid) is exempt income or not taxable?

In my openion it should not be exempt as it is not taxable because we have paid STT on it.

My question is in relation to Section 14 A

As per my understanding, the same is exempted income