ACIT-16(2), MUMBAI vs. SONIC BIOCHEM EXTRACTIONS PVT. LTD., MUMBAI

आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeal has been filed by the Revenue challenging the impugned order dated 19.11.2025 passed u/s 250 of the Income Tax Act, 1961 ('the Act'), by the CIT(A) for the Assessment Year 2017-18, raising following grounds ;-

2 ITA No.772/Mum/2026 (Sonic Biochem Extractions Pvt Ltd.) i. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.59,50,325/- made under section 68 of the Income-tax Act, 1961, without appreciating that the assessee had failed to discharge the primary onus of establishing the identity, creditworthiness of the creditors and genuineness of the loan transactions during assessment proceedings, despite issuance of notices under section 133(6) of the Act? ii. Whether the Ld. CIT(A) was justified in admitting and relying upon additional evidences furnished during appellate proceedings without demonstrating that the conditions prescribed under Rule 46A of the Income-tax Rules, 1962 were satisfied, thereby violating principles of natural justice and statutory procedure? iii. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made under section 14A read with Rule 8D of the Income-tax Rules, 1962, despite the assessee having earned exempt income during the relevant assessment year and having failed to furnish any working of expenditure relatable to such exempt income?. iv. Whether the Ld. CIT(A) erred in law in holding that no disallowance under section 14A is warranted, without appreciating that Rule 8D is mandatory once the assessee fails to demonstrate that no expenditure was incurred in relation to exempt income? v. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the ad-hoc disallowances made by the Assessing Officer, ignoring the

3 ITA No.772/Mum/2026 (Sonic Biochem Extractions Pvt Ltd.) fact that the assessee failed to substantiate the business expediency, genuineness and exclusive business use of the expenses claimed? vi. Whether the Ld. CIT(A) was justified in law in deleting disallowances relating to operating, factory, travelling, vehicle, telephone, festival and other expenses, despite the absence of complete supporting documentary evidence and the possibility of personal or non-business use? vii. Whether the Ld. CIT(A) failed to appreciate that in the absence of proper supporting bills and vouchers, the Assessing Officer is empowered to make reasonable estimations to safeguard the interest of revenue? 2. Ground No. 1 to 2 raised by the revenue are interrelated and inter-connected and relates to challenging the order of Ld. CIT(A) in deleting the additions made by the Assessing Officer under Section 68 of the Income Tax Act, therefore, we have decided to adjudicate these grounds through the present consolidated order.

4 ITA No.772/Mum/2026 (Sonic Biochem Extractions Pvt Ltd.) by the assessee is genuine. The assessee furnished complete documentary evidences including confirmation from ledgers, PAN and ITR copies, bank statements showing loan transactions of ledger accounts of parties. However, Assessing Officer still made additions without appreciating these evidences, but during the appellate proceedings, upon verification, the identity and creditworthiness of the lender as well as genuineness of the loan transaction stood duly established, therefore, Ld. CIT(A) by considering the documents placed on record by the assessee, deleted the addition. 5. Although, Ld. DR argued that the Ld. CIT(A) violated the provisions of Rule 46A of the Income Tax Rules, 1962, but could not point out any defect in the order passed by Ld. CIT(A) while deleting the additions relying on the documentary evidences by the assessee. 6. Even otherwise, no new facts or circumstances have been placed before us by the Ld. DR in order to controvert or rebut the lawful findings so recorded by Ld. CIT(A), therefore, we find no reasons to interfere or to deviate from the well reasoned order passed by Ld. CIT(A), more particularly when assessee had filed all the documentary evidences before the AO. The AO could not consider the said documentary evidences. However, Ld. CIT(A) who also

5 ITA No.772/Mum/2026 (Sonic Biochem Extractions Pvt Ltd.) enjoys co-terminus powers with those of AO, considered all the documentary evidences filed before the AO as well as those placed before the Ld. CIT(A) and feeling satisfied, deleted the addition. Thus, these grounds raised by the revenue stand dismissed. 7. Ground Nos. 3 to 7 raised by the revenue are related and inter-connected and relates to challenging the order of Ld. CIT(A) in deleting the additions made by the Assessing Officer under Section 14A read with Rule 8D of the Income Tax Rules, 1962, therefore, we have decided to adjudicate these grounds through the present consolidated order. 8. We have heard the Ld. Counsel for both the parties and perused the material on record, judgment cited before us and also the orders passed by the Revenue Authorities. From the records, we noticed that the assessee categorically submit that no expenditure was incurred to earn exempt income and in this regard, furnished complete details including investment summary, interest allocation working, Bank statement, proof that own funds of the assessee were far in excess than the amount of investment made by the assessee, still AO applied Rule 8D without establishing any nexus between expenditure and exempt income. Therefore, after examining the details furnished by the assessee and considering the decision of the coordinate Bench of ITAT in

6 ITA No.772/Mum/2026 (Sonic Biochem Extractions Pvt Ltd.) assessee’s own case, Ld. CIT(A) rightly concluded that no disallowance is warranted under Section 14A of the Income Tax Act. No new facts or circumstances have been brought before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, we see no reasons to interfere into or to debate from the ill reasoned findings so recorded by Ld. CIT(A). 9. Hence, these grounds raised by the revenue stand dismissed. 10. Consequently, appeal filed by the revenue stands dismissed. Order pronounced in the open court on 14.07.2026

Sd/- Sd/- (PRABHASH SHANKAR) (SANDEEP GOSAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 14/07/2026 Z.U., PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलार्थी / The Assessee 1. प्रत्यर्थी / The Respondent. 2. संबंधित आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधिधि, आयकर अपीलीय अधिकरण,मुम्बई/ DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6.

7 ITA No.772/Mum/2026 (Sonic Biochem Extractions Pvt Ltd.)

आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy//

उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai