J.M FINANCIAL LIMITED (SUCESSOR TO J.M FINANCIAL INSTITUTION SECURITIES LIMITED ,MUMBAI vs. DCIT, CIRCLE 4(3)(1), MUMBAI

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “F” BENCH, MUMBAI BEFORE SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 983/MUM/2026(AY: 2017-18)

ACIT-4(3)(1), Mumbai. vs. JM Financial Limited. (successor of JM Room No.649, 6th Floor, Financial Institutional Securities Ltd.), Aayakar Bhawan, Μ.Κ. 7th Floor, Cnergy, Appasaheb Marathe Road, Mumbai-400020 Marg, Prabhadevi, Mumbai-400025. PAN/GIR No: AAACM7079C (Appellant) (Respondent) Assessee by Dr. K. Shivram Revenue by Shri Rajendra Chadekar (CIT-DR)

ITA No. 612/MUM/2026 (AY: 2017-18) JM Financial Limited. (successor vs. Deputy Commissioner of Income Tax, of JM Financial Institutional Circle 4(3)(1), Mumbai. Aayakar Bhawan, Securities Ltd.), M.K. Marg, Mumbai-400020. 7th Floor, Cnergy, Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. PAN/GIR No: AAACM7079C (Appellant) (Respondent) Assessee by Dr. K. Shivram Revenue by Shri Rajendra Chadekar (CIT-DR) Date of Hearing 20.04.2026 Date of Pronouncement 20.05.2026

O R D E R PER BIJYANANDA PRUSETH, AM:

These cross appeals filed by the revenue and assessee emanate from the

order passed under section 250 of the Income-tax Act, 1961 (in short, 'Act') by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre [in

short, 'CIT(A)'], Delhi, dated 15.07.2025 for the assessment year (AY) 2020-21.

" 1. Whether on the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals) erred in deleting the disallowance of reimbursement of service charges/rent amounting to Rs.4,07,40,540/, without appreciating that the assessee failed to establish actual possession and business use of the premises for the period prior to execution of the agreement dated 19.09.2016 and that no valid or contemporaneous agreement existed for the intervening period. The relief granted is contrary to the findings recorded in the assessment order as well as in the remand report. 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of support service charges of Rs. 6,45,70,041/- paid to the overseas group entity, without appreciating the serious infirmities pointed out by the Assessing Officer regarding genuineness, quantification and verifiability of the expenditure, including inconsistencies in agreements, abnormal billing patterns and absence of reliable, year-specific cost allocation details. The deletion is not in conformity with the findings recorded in the remand report. 3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of lease rent on vehicles amounting to Rs.46,63,439/ by placing undue emphasis on the contractual form and accounting treatment, while ignoring the substance of the transaction which clearly indicated a finance lease, as brought out in the assessment order. 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the additional disallowance of Rs.1,89,95,500/ made under section 14A read with Rule BD of the Income-tax Act, 1961, by erroneously holding that the Assessing Officer had not recorded objective dissatisfaction, despite such dissatisfaction recorded in the assessment order. 2

“A) Assessment in name of merged company - bad in law

1) The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] erred in upholding the assessment order passed in the non-existing entity by the assessing officer, in spite of intimating the demerger and merger vide letter dt. 22-2-2018 hence the order of the CIT(A), may be quashed as bad in law.

2) The order of the learned CIT(A) and the assessing officer being contrary to the law laid down by the apex court and jurisdictional high court, the order of the CIT (A) affirming the order of the assessing officer may be quashed and held to be bad in law.

3) The learned CIT(A) having noted that record confirms that the erstwhile JM Financial Institutional Securities Limited stood merged with JM Financial Ltd. erred on facts and in law in holding that no prejudice survived as appellant had placed on record all explanations and material on record and the participation of amalgamated company has been full and effective and that annulment of assessment on this technical objection was not warranted. Without prejudice to above B) Additional disallowance u/s. 14A-Rs. 1,89,95,500/-

4) On the facts and circumstances of the case, the learned CIT(A) failed to appreciate that the learned Assessing officer should record his dissatisfaction regarding correctness of claim of assessee in respect of expenditure and to arrive at such dissatisfaction, he should give cogent reasons. The learned assessing officer having not recorded any specific dissatisfaction, 3 the order of learned CIT(A) confirming the disallowance may be directed to be deleted. 5) The learned CIT(A) erred on facts and in law in confirming the additional disallowance made by the learned Assistant Commissioner of Income Tax, Circle 4(3)(1), Mumbai (AO) u/s. 14A of Rs. 1,89,95,500/- 6) The learned CIT(A) while confirming the additional disallowance u/s. 14A of Rs.1,89,95,500/- erred in holding that the explanation offered by the appellant largely rested on general assertions such as the availability of surplus interest, or minimal administrative involvement. 7)The learned CIT(A) while confirming the additional disallowance u/s. 14A of Rs.1,89,95,500/- erred in holding that that the appellant had not produced any year specific fund-flow statements, expenditure mapping schedules, or managerial allocation records capable of demonstrating that no portion of indirect expenditure has any nexus with the exempt income. 8) Without prejudice to above, dividends were directly credited to the bank hence the disallowance of Rs.19,92,336/- attributable u/s. 14A are made on scientific basis, therefore order of the disallowance affirmed by the CIT(A) may be directed to be deleted.

C)General

9) The above grounds of appeal are without prejudice to one another and your appellant craves leave to add, alter, amend, delete or modify any of the above grounds of appeal. "

Institutional Securities Ltd., filed its return of income for AY 2017-18 on

27.11.2017 declaring total income at Rs.65,98,02,530/-. Notice u/s 143(2) was

issued on 09.08.2018. After hearing the assessee, assessment order u/s 143(3)

was passed on 29.12.2019 by making various additions totaling to Rs.12,89,69,520/- and total income was assessed at Rs.78,87,72,050/- as against

the returned income of Rs.65,78,02,530/-.

CIT(A). The appellant raised various grounds including ground on validity of

assessment in the hands of non-existing entity. The CIT(A) partly allowed the

appeal, however, he dismissed the ground on assessment of a non-existing entity

due to amalgamation. He observed that the record confirms that the erstwhile JM

Financial Institutional Securities Ltd. merged with JM Financial Ltd. pursuant to

the scheme of amalgamation. He did not decide the issue in favour of the

appellant by observing that it has not demonstrated any specific prejudice arising

from the error in the name of the assessee. The amalgamated company also

extended full and effective participation during the assessment proceedings.

Hence, he decided the ground against the assessee. However, he has partly

allowed the appeal by deciding both ways in respect of the other grounds on

merits.

authorities.

academic in nature and do require adjudication.

ITA No.983/Mum/2026

No.612/Mum/2026 and set aside and quashed the assessment order. Hence, the

appeal by revenue is infructuous. The appeal is accordingly dismissed.

is dismissed.

Order is pronounced on 20.05.2026.

Sd/- Sd/- (SANDEEP SINGH KARHAIL) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER

*Aniket Chand (Sr. PS) MUMBAI Date: 20.05.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order Assistant Registrar ITAT, MUMBAI