GOPALDAS VISRAM& COMPANY LIMITED,MUMBAI vs. ACIT, CIRCLE 4(2)(2), MUMBAI

आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER:

Present appeal filed by the assessee is directed against the order passed by NFAC, Delhi [hereinafter “the Ld.CIT(A)”] dated 27/11/2025, for AY 2016-17, on the following grounds:-

“1. The Commissioner of Income-tax (Appeals) at the National Faceless Appeal Centre, Delhi (hereinafter referred to as the CIT(A)) erred in upholding the action of the Assistant Commissioner of Income-tax - 4(2)(2), Mumbai (hereinafter referred to as the Assessing Officer) in making an ad hoc disallowance of Rs 2,31,354, being 10 per cent of business promotion expenses. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer inasmuch as the CIT(A) has not appreciated the facts of the case in its

ITA 467/MUM/2026 GOPALDAS VISRAM& COMPANY LIMITED entirety before upholding the said disallowance, and hence, the same is required to be deleted. 2. The CIT(A) erred in upholding the action of the Assessing Officer in making a disallowance of common expenses Rs 7,44,619.

The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have confirmed the action of the Assessing Officer inasmuch as the CIT(A) has not correctly appreciated the facts of the case in its entirety and hence, the impugned disallowance is not warranted. 3. The CIT(A) erred in upholding the action of the Assessing Officer in making a disallowance of Rs 1,32,997 made on account of expenses incurred for earning dividend income by invoking the provisions of section 14A read with rule 8D.

The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the impugned disallowance made by the Assessing Officer inasmuch as the same is not in accordance with the prescription of section 14A read with rule 8D(2).

The appellants further contend that the calculation of the disallowance is not in accordance with the provisions of rule 8D. 4. The CIT(A) erred in upholding the action of the Assessing Officer in making a disallowance of additional depreciation Rs 50,58,487 under section 32(1)(iia) on sundry assets acquired and installed during the year.

The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have confirmed the action of the Assessing Officer inasmuch the said sundry assets have been acquired and installed during the year and hence, the said disallowance requires to be deleted.

The appellants crave leave to add to, alter or amend the aforestated grounds of appeal.”

The assessee filed its return of income for A.Y. 2016-17 declaring total income of Rs.10,48,33,240/- under the normal provisions of the Act and book profit of Rs.10,97,16,682/- u/s 115JB of the Act. The case was selected for scrutiny and assessment was completed u/s 143(3) of the Act. During the assessment proceedings, the Ld. AO made an ad hoc disallowance of business promotion expenses amounting to Rs.2,31,354/-, disallowance of common expenses comprising telephone and electricity expenses amounting to Rs.7,44,619/-, disallowance of

ITA 467/MUM/2026 GOPALDAS VISRAM& COMPANY LIMITED additional depreciation claimed on sundry assets amounting to Rs.50,58,487/- and disallowance u/s 14A r.w. Rule 8D amounting to Rs.1,32,997/-.

Aggrieved by the order passed by Ld.AO, the assessee preferred an appeal before the Ld. CIT(A).

2.1. Before the Ld. CIT(A), the assessee challenged all the aforesaid disallowances and contended that the business promotion expenses were incurred wholly and exclusively for the purposes of business, the common expenses were allowable business expenditure, the sundry assets constituted eligible plant and machinery qualifying for additional depreciation u/s 32(1)(iia) and that no disallowance u/s 14A was warranted in the absence of exempt income. However, the Ld. CIT(A) observed that despite issuance of several notices, there was no effective compliance from the assessee and accordingly proceeded to adjudicate the appeal on the basis of material available on record. The Ld. CIT(A) ultimately confirmed all the additions/disallowances made by the Ld. AO.

Aggrieved by the impugned order passed by the Ld. CIT(A), the assessee is in appeal before this Tribunal.

ITA 467/MUM/2026 GOPALDAS VISRAM& COMPANY LIMITED the Ld. CIT(A) for fresh adjudication after considering all evidences and submissions filed by the assessee. In respect of Ground No. 3, the Ld. AR submitted that no exempt income had been earned by the assessee during the year and, therefore, no disallowance u/s 14A could be sustained.

3.1. Per contra, the Ld. DR relied upon the orders of the authorities below. The Ld. DR submitted that sufficient opportunities had been granted during the appellate proceedings and that the assessee failed to effectively prosecute its appeal before the Ld. CIT(A). It was further submitted that the findings recorded by the Ld. AO as well as the Ld. CIT(A) may be upheld.

We have perused the submissions advanced by both sides in light of the records placed before this Tribunal.

Accordingly, Ground Nos. 1, 2 and 4 are allowed for statistical purposes.

ITA 467/MUM/2026 GOPALDAS VISRAM& COMPANY LIMITED 5. As regards Ground No. 3 relating to disallowance u/s 14A r.w. Rule 8D amounting to Rs.1,32,997/-, it is an undisputed fact that the assessee had not earned any exempt income during the year under consideration. The Special Bench of the Delhi Tribunal in the case of ACIT vs. Vireet Investment (P.) Ltd. [2017] 165 ITD 27 (Delhi)(SB) has held that in the absence of exempt income, no disallowance u/s 14A can be made. Respectfully following the aforesaid decision, we direct deletion of the disallowance made u/s 14A r.w. Rule 8D. Accordingly, Ground No. 3 raised by the assessee stands allowed.

In the result, appeal filed by assessee stands partly allowed for statistical purposes.

Order pronounced in the open court on 05/06/2026

Sd/- Sd/- JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 05/06/2026 SC. Sr. P.S.

ITA 467/MUM/2026 GOPALDAS VISRAM& COMPANY LIMITED Copy to:

GOPALDAS VISRAM COMPANY LIMITED, 8, FIDA BUILDING, 18, S.G. MARG, PRINCES STREET, 1 MUMBAI-400002, MAHARASHTRA ACIT, CIRCLE 4(2)(2), 2 AAYAKAR BHAVAN, M.K. ROAD, MUMBAI, MUMBAI-400020, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE