BAJAJ CONSULTANTS PRIVATE LIMITED,MUMBAI vs. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 4(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER)

ITA No.2676/MUM/2025 Assessment Year: 2017-18

Bajaj Consultants Private Dy. Commissioner of Limited, Income-tax, Central Circle Vs. 24-B, Rajabahadur – 4(1), 1916, 19th Floor, Air Compound, Hamam India Building, Nariman Street, Fort, Mumbai, Point, MUMBAI-400021. MUMBAI. PAN NO. AAACB 4417 H Appellant Respondent Assessee by : Ms. Srushti Chawda : Shri Leyaqat Ali Aafaqui, Sr. DR. Department by

: 17/12/2025 Date of Hearing Date of pronouncement : 09/02/2026

ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order, dated 28.03.2025, passed by the Learned Commissioner of Income Tax (Appeals) – 52 Mumbai [in short ‘the Ld. CIT(A)’] for Assessment Year (in short A.Y) 2017 – 18, raising following grounds:

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“The following ground The following grounds of appeal are without prejudice to one another: s of appeal are without prejudice to one another: - 1. On the facts and the circumstances of the appellant company's case and in law, 1. On the facts and the circumstances of the appellant c ompany's case and in law, the Ld. Commissioner of Income Tax (Appeals) d. Commissioner of Income Tax (Appeals) - 52, Mumbai has erred in co 52, Mumbai has erred in confirming the disallowance of Rs.36,15,769/- made by the Assessing Officer u/s 14A read with the disallowance of Rs. by the Assessing Officer u/s 14A read with Rule 8D without appreciating the fact that the appellant company had made suo moto Rule 8D without appreciating the fact that the appellant company had m Rule 8D without appreciating the fact that the appellant company had m disallowance of Rs.3,60,748/ 3,60,748/- which was worked out by taking into account specific which was worked out by taking into account specific expenses incurred for earning exempt income in the form of salary expenses of expenses incurred for earning exempt income in the form of salary expenses of employees involved in earning exempt income and charges paid for the demat employees involved in earning exempt income and charges paid for the demat employees involved in earning exempt income and charges paid for the demat account and accordingly no further disallowance was warranted. account and accordingly no further disallowance was warranted. account and accordingly no further disallowance was warranted. 2. On the facts and the circumstances of the appellant company's case and in law, 2. On the facts and the circumstances of the appellant company's case and in law, 2. On the facts and the circumstances of the appellant company's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of d. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of d. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs.36,15,769/- made by the Assessing Officer u/s 14A read with Rule 8D despite made by the Assessing Officer u/s 14A read with Rule 8D despite made by the Assessing Officer u/s 14A read with Rule 8D despite the fact that the appellant has made investments yielding exempt income from its the fact that the appellant has made investments yielding exempt income from its the fact that the appellant has made investments yielding exempt income from its own funds and while ignoring the decision of Ld. Commissioner of Income Tax ile ignoring the decision of Ld. Commissioner of Income Tax ile ignoring the decision of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi and upheld by the co-ordinate (Appeals), National Faceless Appeal Centre, Delhi and upheld by the co (Appeals), National Faceless Appeal Centre, Delhi and upheld by the co Bench of Hon'ble Income Tax Appellant Tribunal, Mumbai, in the appellant's own case Bench of Hon'ble Income Tax Appellant Tribunal, Mumbai, in the appellant's own case Bench of Hon'ble Income Tax Appellant Tribunal, Mumbai, in the appellant's own case for the assessment year 2018-19 and 2020-21 on the identical facts and for the assessment year 2018 21 on the identical facts and circumstances of the case and the legal grounds wherein it was held that the circumstances of the case and the legal grounds wherein it was held that the circumstances of the case and the legal grounds wherein it was held that the provision of Rule 8D cannot be invoked by the Assessing Officer as it is clear from the provision of Rule 8D cannot be invoked by the Assessing Officer as it is clear from the provision of Rule 8D cannot be invoked by the Assessing Officer as it is clear from the record of appellant that no borrowed funds were util of appellant that no borrowed funds were utilized and investment was made ized and investment was made by appellant from its own funds to earn tax free income. by appellant from its own funds to 3. On the facts and the circumstances of the appellant company's case and in law, 3. On the facts and the circumstances of the appellant company's case and in law, 3. On the facts and the circumstances of the appellant company's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of the Ld. Commissioner of Income Tax (Appeals) nfirming the disallowance of Rs.36,15,769/- made by the Assessing made by the Assessing Officer u/s 14A read with Rule 8 Officer u/s 14A read with Rule 8D while ignoring the fact that the expenditure related to earning exempt income of ignoring the fact that the expenditure related to earning exempt in ignoring the fact that the expenditure related to earning exempt in Rs.3,60,748/- has been debited separately in the Profit & Loss A/c of the appellant has been debited separately in the Profit & Loss A/c of the appellant has been debited separately in the Profit & Loss A/c of the appellant company and separate ledger account is maintained for the expenses incurred to company and separate le dger account is maintained for the expenses incurred to earn exempt income and which has been suo moto disallowed by the appellant earn exempt income and which has been suo moto disallowed by the appellant earn exempt income and which has been suo moto disallowed by the appellant company. 4. On the facts and the circumstances of the appellant company's case and in law, 4. On the facts and the circumstances of the appellant company's case and in law, 4. On the facts and the circumstances of the appellant company's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of the Ld. Commissioner of Income Tax nfirming the disallowance of Rs.36,15,769/-made by the Assessing Officer u/s 14A read with Rule 8D made by the Assessing Officer u/s 14A read with Rule 8D made by the Assessing Officer u/s 14A read with Rule 8D disregarding the fact that all other expenditure debited to the Profit & Loss A/c of the disregarding the fact that all other expenditure debited to the Profit & Loss A/c of the disregarding the fact that all other expenditure debited to the Profit & Loss A/c of the appellant company are related to the main financial consultancy business of the appellant company are related to the main financial consultancy business of the company and not investment activity. company and not investment activity. 5. The appellant craves leave to add to, alter, amend, modify and/or delete all or any 5. The appellant craves leave to add to, alter, amend, modify and/or delete all or any 5. The appellant craves leave to add to, alter, amend, modify and/or delete all or any of the foregoing grounds of appeal. of the foregoing grounds of appeal. The appellant prays before the Hon'ble Tribunal to delete the impugned disallowance The appellant prays before the Hon'ble Tribunal to delete the impugned disallowance made by the Assessing Officer and confirmed by the Ld. Commissioner of Income Tax made by the Assessing Officer and confirmed by the Ld. Commissioner of Income Tax made by the Assessing Officer and confirmed by the Ld. Commissioner of Income Tax (Appeals) or any other relief as the Hon'ble Tribunal may deem fit. (Appeals) or any other relief as the Hon'ble Tribunal may deem fit. (Appeals) or any other relief as the Hon'ble Tribunal may deem fit.

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2.1 Briefly stated, the facts of the case are that Briefly stated, the facts of the case are that Briefly stated, the facts of the case are that the assessee is engaged in the business of engaged in the business of financial services, inter financial services, inter-corporate deposits, and investment activities. For the year under consideration, deposits, and investment activities. For the year under consideration, deposits, and investment activities. For the year under consideration, the assessee filed its return of income on 28.10.2017 declaring a total the assessee filed its return of income on 28.10.2017 declaring a total the assessee filed its return of income on 28.10.2017 declaring a total income of ₹19,01,34,770/ 19,01,34,770/-. The return was selected for scrutiny and . The return was selected for scrutiny and statutory notices under the Act, were duly issued and complied with. notices under the Act, were duly issued and complied with. notices under the Act, were duly issued and complied with.

2.2 During the course of scrutiny proceedings, the Assessing Officer During the course of scrutiny proceedings, the Assessing Officer During the course of scrutiny proceedings, the Assessing Officer noted that the assessee had made investments in shares amounting noted that the assessee had made investments in shares amounting noted that the assessee had made investments in shares amounting to ₹40,86,22,630/- as on 31.03.2017, as against investments of as on 31.03.2017, as against investments of ₹7,26,60,081/- as on 31.03.2016. The Assessing Officer further as on 31.03.2016. The Assessing Officer further as on 31.03.2016. The Assessing Officer further observed that during the year the assessee had earned the following observed that during the year the assessee had earned the following observed that during the year the assessee had earned the following income claimed as exempt (i) dividend income of income claimed as exempt (i) dividend income of ₹21,41,195/ 21,41,195/- under section 10(34) of the Act; (ii) interest income of ₹1,68,72,735/- section 10(34) of the Act; (ii) interest income of section 10(34) of the Act; (ii) interest income of claimed exempt under section 10(15)(iv)(h) of the Act; and (iii) long- claimed exempt under section 10(15)(iv)(h) of the Act; and (iii) long claimed exempt under section 10(15)(iv)(h) of the Act; and (iii) long term capital gains of term capital gains of ₹4,73,00,987/- claimed exempt under section claimed exempt under section 10(38) of the Act.

2.3 The assessee submitted that it The assessee submitted that it had, on its own, made a had, on its own, made a disallowance under section 14A of the Act in respect of expenditure disallowance under section 14A of the Act in respect of expenditure disallowance under section 14A of the Act in respect of expenditure relatable to exempt income by adding back demat charges of relatable to exempt income by adding back demat charges of relatable to exempt income by adding back demat charges of

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₹22,838/- and salary expenditure of and salary expenditure of ₹3,37,910/- incurred for staff handling investment- -related activities. It was contended that the total s. It was contended that the total suo motu disallowance of ₹3,60,748/- adequately covered all suo motu disallowance of adequately covered all expenditure incurred in relation to exempt income and that no expenditure incurred in relation to exempt income and that no expenditure incurred in relation to exempt income and that no further disallowance was warranted. The assessee also claimed that further disallowance was warranted. The assessee also claimed that further disallowance was warranted. The assessee also claimed that investments were made out of its investments were made out of its own funds and no borrowed funds own funds and no borrowed funds were utilised.

2.4 The Assessing Officer, however, did not accept the assessee’s The Assessing Officer, however, did not accept the assessee’s The Assessing Officer, however, did not accept the assessee’s claim and recorded dissatisfaction with the correctness of the suo claim and recorded dissatisfaction with the correctness of the suo claim and recorded dissatisfaction with the correctness of the suo motu disallowance. The Assessing Officer observed that the assessee motu disallowance. The Assessing Officer observed that the assessee motu disallowance. The Assessing Officer observed that the assessee had not computed the disallowance in accordance with section 14A t computed the disallowance in accordance with section 14A t computed the disallowance in accordance with section 14A read with Rule 8D of the Income read with Rule 8D of the Income-tax Rules, 1962 (“the Rules”), and tax Rules, 1962 (“the Rules”), and that expenditure relating to office infrastructure, rent, salaries, that expenditure relating to office infrastructure, rent, salaries, that expenditure relating to office infrastructure, rent, salaries, depreciation, and other administrative costs had not been considered. depreciation, and other administrative costs had not been cons depreciation, and other administrative costs had not been cons It was further observed that investments, including those in It was further observed that investments, including those in It was further observed that investments, including those in subsidiary companies, were capable of yielding exempt income and subsidiary companies, were capable of yielding exempt income and subsidiary companies, were capable of yielding exempt income and thus attracted the provisions of section 14A. thus attracted the provisions of section 14A. The Assessing Officer The Assessing Officer however rejected the claim of the assessee of the suo-motu however rejected the claim of the assessee of the suo however rejected the claim of the assessee of the suo disallowance and he recorded dissatisfaction to the claim of the disallowance and he recorded dissatisfaction to the claim of the disallowance and he recorded dissatisfaction to the claim of the assessee observing as under: assessee observing as under:

“4.3 The submission of the assessee is considered but not acceptable. 4.3 The submission of the assessee is considered but not acceptable. 4.3 The submission of the assessee is considered but not acceptable. It is to mention that assessee has itself disallowed certain expenditure amounting to It is to mention that assessee has itself disallowed certain expenditure amounting to It is to mention that assessee has itself disallowed certain expenditure amounting to Rs.3,14,000/- in the computation of total income. However, it is to mention here that in the computation of total income. However, it is to mention here that in the computation of total income. However, it is to mention here that assessee has not computed the disallowance as per provisions of section 14A r.w assessee has not computed the disallowance as per provisions of section 14A r.w assessee has not computed the disallowance as per provisions of section 14A r.w Rule BD of IT Rules, 1962. Further, the assessee failed to disallow such Rule BD of IT Rules, 1962. Further, the assessee failed to disallow such Rule BD of IT Rules, 1962. Further, the assessee failed to disallow such inadmissible deduc inadmissible deduction in its computation of income which shows the wilful tion in its computation of income which shows the wilful

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intention of the assessee for such non disallowance. As far as investment by the intention of the assessee for such non disallowance. As far as investment by the intention of the assessee for such non disallowance. As far as investment by the assessee company in its subsidiary company is concerned, that investments will assessee company in its subsidiary company is concerned assessee company in its subsidiary company is concerned, that investments will also earn dividend income for the assessee which is not chargeable to tax and will dividend income for the assessee which is not chargeable to tax and will dividend income for the assessee which is not chargeable to tax and will attract the provision of section 14A of the IT Act. attract the provision of section 14A of the IT Act. Further, perusal of the balance sheet and profit & loss account submitted reveals Further, perusal of the balance sheet and profit & loss account submitted reveals Further, perusal of the balance sheet and profit & loss account submitted reveals that the assessee has been maintaining office pr that the assessee has been maintaining office premises, staff, etc. Assessee is also emises, staff, etc. Assessee is also debiting expenditure in the nature of office, rents, salary and depreciation against debiting expenditure in the nature of office, rents, salary and depreciation against debiting expenditure in the nature of office, rents, salary and depreciation against such infrastructure which cannot be said to be used exclusively for the purpose of such infrastructure which cannot be said to be used exclusively for the purpose of such infrastructure which cannot be said to be used exclusively for the purpose of its business. Therefore, keeping in view, the amoun its business. Therefore, keeping in view, the amount of investments made by the t of investments made by the assessee and expenditure claimed against utilizing such infrastructure, it will be assessee and expenditure claimed against utilizing such infrastructure, it will be assessee and expenditure claimed against utilizing such infrastructure, it will be valid to say that assessee has utilized his infrastructure in making such valid to say that assessee has utilized his infrastructure in making such valid to say that assessee has utilized his infrastructure in making such investments earning exempt Income. Therefore, provisions of section 14A r.w. Rule investments earning exempt Income. Therefore, provisions of section 14 investments earning exempt Income. Therefore, provisions of section 14 8D are clearly attracted in this case. 8D are clearly attracted in this case. 4.4 In view of the above discussion, I am fully satisfied that though the assessee 4.4 In view of the above discussion, I am fully satisfied that though the assessee 4.4 In view of the above discussion, I am fully satisfied that though the assessee has not claimed actual expenditure directly attributable to the exempt income, it has not claimed actual expenditure directly attributable to the exempt income, it has not claimed actual expenditure directly attributable to the exempt income, it has, nevertheless, incurred expenditure has, nevertheless, incurred expenditure which are otherwise claimed against which are otherwise claimed against taxable income and are relatable to the business infrastructure maintained by the taxable income and are relatable to the business infrastructure maintained by the taxable income and are relatable to the business infrastructure maintained by the assessee and used in its business as well as making investment in share. It is assessee and used in its business as well as making investment in share. It is assessee and used in its business as well as making investment in share. It is pertinent to note that the assessee has claimed to have incurred merger any pertinent to note that the assessee has claimed to have inc pertinent to note that the assessee has claimed to have inc expenditure in relation to investments from which exempt income is earned, the expenditure in relation to investments from which exempt income is earned, the expenditure in relation to investments from which exempt income is earned, the assessee could not have invested or earned any exempt income from such assessee could not have invested or earned any exempt income from such assessee could not have invested or earned any exempt income from such investments without maintaining such infrastructure, expenses of which are claimed investments without maintaining such infrastructure, expenses of which are claimed investments without maintaining such infrastructure, expenses of which are claimed in the profit and loss profit and loss account. Before making disallowance u/s. 144 r.w. account. Before making disallowance u/s. 144 r.w. Rule 8D, it would be relevant to quote section 14A and Rule BD at this juncture. would be relevant to quote section 14A and Rule BD at this juncture. would be relevant to quote section 14A and Rule BD at this juncture. Section 14A read as under Section 14A read as under: Expenditure incurred in relation to income not includible in total income 14A Expenditure incurred in relation to income not includible in total income 14A Expenditure incurred in relation to income not includible in total income 14A 1. For the purpose of computing the total income under this Chapter, no deduction For the purpose of computing the total income under this Chapter, no deduction For the purpose of computing the total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to shall be allowed in respect of expenditure incurred by the assessee in relation to shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act. income which does not form part of the total income under this Act. income which does not form part of the total income under this Act. 2. The Assessing Officer s 2. The Assessing Officer shall determine the amount of expenditure incurred in hall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act, relation to such income which does not form part of the total income under this Act, relation to such income which does not form part of the total income under this Act, in accordance with such method as may be prescribed, if the Assessing Officer, in accordance with such method as may be prescribed, if the Assessing Officer, in accordance with such method as may be prescribed, if the Assessing Officer, having regard to the accounts of the as having regard to the accounts of the assessee is not satisfied with the correctness of sessee is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which the claim of the assessee in respect of such expenditure in relation to income which the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under this Act. does not form part of the total income under this Act. 3. The provisions of sub section (2) shall also apply in relation to a case where an 3. The provisions of sub section (2) shall also apply in relation to 3. The provisions of sub section (2) shall also apply in relation to assessee claims that no expenditure has been incurred by him/his in relation to assessee claims that no expenditure has been incurred by him/his in relation to assessee claims that no expenditure has been incurred by him/his in relation to income which does not form part of the total income under this Act. income which does not form part of the total income under this Act. income which does not form part of the total income under this Act.

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Thus, limb 2 of the above section automatically comes into play if the assessee Thus, limb 2 of the above section automatically comes into play if the assessee Thus, limb 2 of the above section automatically comes into play if the assessee contends that no or very less expenditure if the expenditure disallowed by the at no or very less expenditure if the expenditure disallowed by the at no or very less expenditure if the expenditure disallowed by the assessee is not as per the working of under section 14A r.w.r 8D expenditure has assessee is not as per the working of under section 14A r.w.r 8D expenditure has assessee is not as per the working of under section 14A r.w.r 8D expenditure has been incurred by the assessee to earn the exempt income. Further, the assessee has been incurred by the assessee to earn the exempt income. Further, the assessee has been incurred by the assessee to earn the exempt income. Further, the assessee has taken plea that investme taken plea that investment cannot be considered for the disallowance u/s 14A of nt cannot be considered for the disallowance u/s 14A of the IT Act. This argument of the assessee is not acceptable because no documentary the IT Act. This argument of the assessee is not acceptable because no documentary the IT Act. This argument of the assessee is not acceptable because no documentary evidence in this regard has been submitted by the assessee and in the assessment evidence in this regard has been submitted by the assessee and in the assessment evidence in this regard has been submitted by the assessee and in the assessment of earlier year also, such investmen of earlier year also, such investments were considered for the disallowance u/s ts were considered for the disallowance u/s 14A. Even otherwise, the groupism of investment can only be done in the same kind 14A. Even otherwise, the groupism of investment can only be done in the same kind 14A. Even otherwise, the groupism of investment can only be done in the same kind of investments only. Thus, the fact remains undisputed that the disallowance is to of investments only. Thus, the fact remains undisputed that the disallowance is to of investments only. Thus, the fact remains undisputed that the disallowance is to be worked out mandatorily as per Rule 8D of Inc be worked out mandatorily as per Rule 8D of Income-tax Rule. In this regard, tax Rule. In this regard, reliance is placed on the following judgments: reliance is placed on the following judgments:- 4.5.1 The Hon'ble Bombay High Court in the case of Godrej & Boyce applied to Godrej & Boyce applied to 4.5.1 The Hon'ble Bombay High Court in the case of work Manufacturing Co. Ltd. [328 ITR 81] work Manufacturing Co. Ltd. [328 ITR 81] has held that Rule has held that Rule 8D has to out the disallowance u/s 14A with effect from 2008 disallowance u/s 14A with effect from 2008-09 onwards where the assessing 09 onwards where the assessing officer is not satisfied with the correctness of the claim of the assessee. In the officer is not satisfied with the correctness of the claim of the assessee. In the officer is not satisfied with the correctness of the claim of the assessee. In the instant case, the undersigned is not satisfied with the claim of the assessee, hence instant case, the undersigned is not satisfied with the claim of the assessee, hen instant case, the undersigned is not satisfied with the claim of the assessee, hen the disallowance u/s 14A has to be calculated the disallowance u/s 14A has to be calculated within the provision of Rule 8D within the provision of Rule 8D of Income-tax Rule. 4.5.2 In the case of Daga Capital Management (P) Ltd. (2009) 117 ITD 169 Daga Capital Management (P) Ltd. (2009) 117 ITD 169 Daga Capital Management (P) Ltd. (2009) 117 ITD 169, the Hon'ble ITAT (Special Bench. Mumbai) held that Sec. 14A of the IT Act has an Hon'ble ITAT (Special Bench. Mumbai) held that Sec. 14A of the IT Act has an Hon'ble ITAT (Special Bench. Mumbai) held that Sec. 14A of the IT Act has an overriding effect and applies to all expenditure in relation to exempted income, even overriding effect and applies to all expenditure in relation to exempted income, even overriding effect and applies to all expenditure in relation to exempted income, even though such expenditure would have been allowable under other provisions such as though such expenditure would have been allowable under other provisions such as though such expenditure would have been allowable under other provisions such as Sec. 36(1)(ii) It was further held that u/s 14A, not only direct expenditure, but also Sec. 36(1)(ii) It was further held that u/s 14A, not only direct expenditure, but also Sec. 36(1)(ii) It was further held that u/s 14A, not only direct expenditure, but also the indirect expenditure can be considered. It was also held that onus in this regard e indirect expenditure can be considered. It was also held that onus in this regard e indirect expenditure can be considered. It was also held that onus in this regard is upon the assessee to prove that a particular does not come under the ambit of is upon the assessee to prove that a particular does not come under the ambit of is upon the assessee to prove that a particular does not come under the ambit of Sec. 14A. The ratio of this judgment is squarely applicable to the facts of the instant Sec. 14A. The ratio of this judgment is squarely applicable to the facts of the instant Sec. 14A. The ratio of this judgment is squarely applicable to the facts of the instant case. 4.5.3 Further, CBDT, vide circular No. 5 of 2014 dated 11/02/2014 has clarified 4.5.3 Further, CBDT, vide circular No. 5 of 2014 dated 11/02/2014 has clarified 4.5.3 Further, CBDT, vide circular No. 5 of 2014 dated 11/02/2014 has clarified that the disallowance u/s 14A is to be made even if no exempted income had been that the disallowance u/s 14A is to be made even if no exempted income had been that the disallowance u/s 14A is to be made even if no exempted income had been earned by the assessee during the year under consideration. It has been further earned by the assessee during the year under consideration. It has been further earned by the assessee during the year under consideration. It has been further clarified that even if the assessee claims that no expenditure in respect of exempted t even if the assessee claims that no expenditure in respect of exempted t even if the assessee claims that no expenditure in respect of exempted income are made, such disallowance has to be made. income are made, such disallowance has to be made. In view of the above judicial pronouncements as well as the circular of CBDT. the In view of the above judicial pronouncements as well as the circular of CBDT. the In view of the above judicial pronouncements as well as the circular of CBDT. the contention of the assessee, if so raised, is not a contention of the assessee, if so raised, is not acceptable. Thus, I am of the opinion cceptable. Thus, I am of the opinion that the fact remains undisputed that the disallowance is to be worked out that the fact remains undisputed that the disallowance is to be worked out that the fact remains undisputed that the disallowance is to be worked out mandatorily as per the norms prescribed under Rule 8D of the Income-tax Rule. The mandatorily as per the norms prescribed under Rule 8D of the Income mandatorily as per the norms prescribed under Rule 8D of the Income case of the assessee is covered under Rule 8D of Income-tax Rule wherein the case of the assessee is covered under Rule 8D of Income case of the assessee is covered under Rule 8D of Income method of working of disallowance of expenditure u/s.14A of the IT Act is laid. method of working of disallowance of expenditure u/s.14A of the IT Act is laid. method of working of disallowance of expenditure u/s.14A of the IT Act is laid. 2.4 Being dissatisfied with the assessee’s claim, the Assessing Being dissatisfied with the assessee’s claim, the Assessing Being dissatisfied with the assessee’s claim, the Assessing Officer invoked Rule 8D and computed disallowance under Rule Officer invoked Rule 8D and computed disallowance under Rule Officer invoked Rule 8D and computed disallowance under Rule

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8D(2)(iii) at 1% of the monthly ave 8D(2)(iii) at 1% of the monthly average value of investments, rage value of investments, ₹36,38,067/ amounting to 36,38,067/-. . After After reducing reducing the the suo suo motu motu disallowance, the net disallowance was determined at ₹36,15,769/-. disallowance, the net disallowance was determined at disallowance, the net disallowance was determined at

On appeal, the Ld. CIT(A) rejected the assessee’s contention that On appeal, the Ld. CIT(A) rejected the assessee’s contention that On appeal, the Ld. CIT(A) rejected the assessee’s contention that 3. no valid satisfaction had been recorded by the Assessing Officer. The no valid satisfaction had been recorded by the Assessing Officer. The no valid satisfaction had been recorded by the Assessing Officer. The Ld. CIT(A) held that the Assessing Officer had given cogent reasons Ld. CIT(A) held that the Assessing Officer had given cogent reasons Ld. CIT(A) held that the Assessing Officer had given cogent reasons for rejecting the assessee’s claim, including failure to account for for rejecting the assessee’s claim, including failur for rejecting the assessee’s claim, including failur infrastructure and managerial costs. The Ld. CIT(A) observed that it infrastructure and managerial costs. The Ld. CIT(A) observed that it infrastructure and managerial costs. The Ld. CIT(A) observed that it was unrealistic to assume that no part of directors’ time, office space, was unrealistic to assume that no part of directors’ time, office space, was unrealistic to assume that no part of directors’ time, office space, or administrative resources was devoted to investment activities. The or administrative resources was devoted to investment activities. or administrative resources was devoted to investment activities. relevant finding of Ld. CI Ld. CIT(A) is reproduced as under: as under:

“8.5. The first issue raised by the appellant is that the AO had not recorded “8.5. The first issue raised by the appellant is that the AO had not recorded “8.5. The first issue raised by the appellant is that the AO had not recorded adequate satisfaction. In this regard, I find that the AO had indeed discussed the adequate satisfaction. In this regard, I find that the AO had indeed discussed the adequate satisfaction. In this regard, I find that the AO had indeed discussed the issue in para 4.3 and subsequent paragraphs of the assessment order and given issue in para 4.3 and subsequent paragraphs of the assessment or issue in para 4.3 and subsequent paragraphs of the assessment or reasons as to why the claim of the appellant is not acceptable. He has brought out reasons as to why the claim of the appellant is not acceptable. He has brought out reasons as to why the claim of the appellant is not acceptable. He has brought out that the appellant had failed to consider the associated cost in the nature of office, that the appellant had failed to consider the associated cost in the nature of office, that the appellant had failed to consider the associated cost in the nature of office, rent, depreciation against such infrastructure which cannot be stated to be used rent, depreciation against such infrastructure which cannot be stated to rent, depreciation against such infrastructure which cannot be stated to exclusively for the purpose of business. In the case of Devarsons Industries P Ltd vs exclusively for the purpose of business. In the case of Devarsons Industries P Ltd vs exclusively for the purpose of business. In the case of Devarsons Industries P Ltd vs ACIT. Gujarat HC, 84 taxmann.com 244, dt. rat HC, 84 taxmann.com 244, dt.25.07.2017, the Hon'ble HC has held 25.07.2017, the Hon'ble HC has held that where AO gave detailed reasons for making disallowance u/s.14A, mere fact that where AO gave detailed reasons for making disallowance u/s.14A, mere fact that where AO gave detailed reasons for making disallowance u/s.14A, mere fact that AO did not arrive at a satisfaction in a particular manner wou AO did not arrive at a satisfaction in a particular manner wou AO did not arrive at a satisfaction in a particular manner would not destroy the mandate of Section 14A. It was held that "As long as there is sufficient material to 14A. It was held that "As long as there is sufficient material to 14A. It was held that "As long as there is sufficient material to enable the Assessing Officer to arrive at such a satisfaction and which is also enable the Assessing Officer to arrive at such a satisfaction and which is also enable the Assessing Officer to arrive at such a satisfaction and which is also recorded by him in the order of assessment, the requirements of the statute would y him in the order of assessment, the requirements of the statute would y him in the order of assessment, the requirements of the statute would be satisfied.” It was further held that the time taken by Board and Senior It was further held that the time taken by Board and Senior It was further held that the time taken by Board and Senior Management needs to be considered. In the present case, it is obvious that the Management needs to be considered. In the present case, it is obvious that the Management needs to be considered. In the present case, it is obvious that the appellant has not considered s appellant has not considered such expenditure. A perusal of the P&L A/c of the uch expenditure. A perusal of the P&L A/c of the appellant shows that the total expenditure is Rs.10,75,95,657/-. This includes appellant shows that the total expenditure is Rs.10,75,95,657/ appellant shows that the total expenditure is Rs.10,75,95,657/ Director's remuneration of Rs. Director's remuneration of Rs.2,98,00,000/- It would be preposterous to hold that no It would be preposterous to hold that no part of Director's functions or time was sp part of Director's functions or time was spent on the investments. Similarly, t ent on the investments. Similarly, the appellant has spent Rs. appellant has spent Rs.21,96,433/- on office repairs and maintenance. The on office repairs and maintenance. The appellant has only disallowed staff salary of Rs.3,37,910/ appellant has only disallowed staff salary of Rs.3,37,910/- and no rental charges whatever has been disallowed. This holds true for other related expenditure such as whatever has been disallowed. This holds true for other relat whatever has been disallowed. This holds true for other related expenditure such as electricity expenditure, computer, stationary etc. The space and other associated electricity expenditure, computer, stationary etc. The space and other associated electricity expenditure, computer, stationary etc. The space and other associated

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cost used by such staff in the office has not been taken into account. Thus, in my cost used by such staff in the office has not been taken into account. Thus, in my cost used by such staff in the office has not been taken into account. Thus, in my view, the AO's action in rejecting the claim of the appellant and drawing his view, the AO's action in rejecting the claim of the appellant and dr view, the AO's action in rejecting the claim of the appellant and dr satisfaction is valid in the eyes of law. This part of the contention of the appellant is satisfaction is valid in the eyes of law. This part of the contention of the appellant is satisfaction is valid in the eyes of law. This part of the contention of the appellant is rejected. 3.1 Further, the Ld. CIT(A) rejected the claim of the assessee of the Ld. CIT(A) rejected the claim of the assessee of the Ld. CIT(A) rejected the claim of the assessee of linkage of the net own fund for interest expenditure as no such linkage of the net own fund for interest expenditure linkage of the net own fund for interest expenditure disallowance was made by the assessing officer. made by the assessing officer. After considering the fter considering the decision of the Income Tax Appellate Tribunal in the assessee’s one decision of the Income Tax Appellate Tribunal in the assessee’s one decision of the Income Tax Appellate Tribunal in the assessee’s one case the Ld. CIT (A) case the Ld. CIT (A) upheld the invocation of section 14A read with upheld the invocation of section 14A read with Rule 8D, while directing the Assessing Officer to recompute the Rule 8D, while directing the Assessing Officer to recompute the Rule 8D, while directing the Assessing Officer to recompute the disallowance strictly in accordance with the monthly average of disallowance strictly in accordance with the monthly average of disallowance strictly in accordance with the monthly average of investments furnished by the assessee investments furnished by the assessee as under:

8.8. The appellant has relied on the decisions of Hon'ble ITAT in its own case the 8.8. The appellant has relied on the decisions of Hon'ble ITAT in its own case the 8.8. The appellant has relied on the decisions of Hon'ble ITAT in its own case the Hon'ble ITAT has observed in vide ITA No.2853/Mum/2023 for AY 2018-19 & Hon'ble ITAT has observed in vide ITA No.2853/Mum/2023 for AY Hon'ble ITAT has observed in vide ITA No.2853/Mum/2023 for AY 2854/Mum/2023 for AY 2020 2854/Mum/2023 for AY 2020-21 dt.27.03.2024. 8.9. Having carefully perused the order of the Hon'ble ITAT, it is seen that the 8.9. Having carefully perused the order of the Hon'ble ITAT, it is seen that the 8.9. Having carefully perused the order of the Hon'ble ITAT, it is seen that the Department had challenged the alternative finding of the CIT(A) and not the finding Department had challenged the alternative finding of the CIT(A) and not the finding Department had challenged the alternative finding of the CIT(A) and not the finding related to section 14A disallowance. related to section 14A disallowance. This is evident from the para 8 of the order of This is evident from the para 8 of the order of the Hon'ble Tribunal, wherein the Hon'ble Tribunal stated as under- the Hon'ble Tribunal, wherein the Hon'ble Tribunal stated as under the Hon'ble Tribunal, wherein the Hon'ble Tribunal stated as under “...Thereafter, in paragraph 7.6 of the order impugned, the CIT(A) has ...Thereafter, in paragraph 7.6 of the order impugned, the CIT(A) has ...Thereafter, in paragraph 7.6 of the order impugned, the CIT(A) has accepted the alternative submission of the Assessee that even if pro accepted the alternative submission of the Assessee that even if pro accepted the alternative submission of the Assessee that even if provisions contained in Rule 8D of the IT Rules were to be applied, only the investments contained in Rule 8D of the IT Rules were to be applied, only the investments contained in Rule 8D of the IT Rules were to be applied, only the investments yielding exempt income during the relevant previous year were to be taken yielding exempt income during the relevant previous year were to be taken yielding exempt income during the relevant previous year were to be taken into consideration. On perusal of the grounds raised by the Revenue, we find into consideration. On perusal of the grounds raised by the Revenue, we find into consideration. On perusal of the grounds raised by the Revenue, we find that the grievance that the grievance raised by the Revenue in the present appeal is restricted to raised by the Revenue in the present appeal is restricted to the order of CIT(A) allowing the without prejudice contention raised by the the order of CIT(A) allowing the without prejudice contention raised by the the order of CIT(A) allowing the without prejudice contention raised by the Assessee....." 8.10. Thus, the ambit of the decisions of the Hon'ble ITAT is related to the 8.10. Thus, the ambit of the decisions of the Hon'ble ITAT is related to the 8.10. Thus, the ambit of the decisions of the Hon'ble ITAT is related to the disallowance of 14A on the disallowance of 14A on the investments which actually yielded exempt income investments which actually yielded exempt income during the year. Therefore, this decision of the Hon'ble Tribunal does not help the during the year. Therefore, this decision of the Hon'ble Tribunal does not help the during the year. Therefore, this decision of the Hon'ble Tribunal does not help the appellant in any manner as the issue addressed was different. appellant in any manner as the issue addressed was different. appellant in any manner as the issue addressed was different. 8.11. In view of the above discussion, I am of the view that the AO has rightly 8.11. In view of the above discussion, I am of the view that 8.11. In view of the above discussion, I am of the view that drawn the satisfaction and proceeded to make a disallo drawn the satisfaction and proceeded to make a disallowance in accordance with wance in accordance with Rule 8D. However, it is noticed that the appellant has indeed filed the working of . However, it is noticed that the appellant has indeed filed the working of . However, it is noticed that the appellant has indeed filed the working of

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monthly average of investments vide letter dt. of investments vide letter dt.19.12.2019. A perusal of the 19.12.2019. A perusal of the same shows that the average investments in at least the initial few months is lower than shows that the average investments in at least the initial few months is lower than shows that the average investments in at least the initial few months is lower than what has been computed by the AO. In any case, since Rule 8D warrants adoption what has been computed by the AO. In any case, since Rule 8D warrants adoption what has been computed by the AO. In any case, since Rule 8D warrants adoption of monthly average of investments and the appellant has provided the same, the AO of monthly average of investments and the appellant has provided the same, the AO of monthly average of investments and the appellant has provided the same, the AO is bound to compute the disallowance in accordance with such balances. To this nd to compute the disallowance in accordance with such balances. To this nd to compute the disallowance in accordance with such balances. To this extent, the arguments of the appellant are agreed with and the AO is directed to extent, the arguments of the appellant are agreed with and the AO is directed to extent, the arguments of the appellant are agreed with and the AO is directed to rework the disallowance in accordance with Rule 8D. The disallowance u/s 14A rework the disallowance in accordance with Rule 8D. The disallowance u/s 14A rework the disallowance in accordance with Rule 8D. The disallowance u/s 14A stands sustained on the b stands sustained on the basis of such reworking (after excluding the suo moto asis of such reworking (after excluding the suo moto disallowance of Rs.3,60,748/ disallowance of Rs.3,60,748/- made by the appellant). 4. We have heard rival submissions of the parties and perused the We have heard rival submissions of the parties and perused the We have heard rival submissions of the parties and perused the relevant material on record, including the factual paper book relevant material on record, including the factual paper book relevant material on record, including the factual paper book containing pages 1-115 and case law compilation 115 and case law compilation 115 and case law compilation. The sole issue before us relates to the disallowance of before us relates to the disallowance of ₹36,15,769/ 36,15,769/- under section 14A of the Act. The Assessee challenges the disallowance on three The Assessee challenges the disallowance on three The Assessee challenges the disallowance on three primary points:

(i) Objective Satisfaction: Objective Satisfaction: That the AO failed to record a lega That the AO failed to record a legally tenable tenable tenable "dissatisfaction" "dissatisfaction" "dissatisfaction" with with with the the the Assessee’s Assessee’s Assessee’s suo motu computation as required by Section 14A(2). computation as required by Section 14A(2). (ii) Sufficiency of Disallowance: Sufficiency of Disallowance: That the suo motu suo motu disallowance adequately covered the specific salary and demat charges adequately covered the specific salary and demat charges adequately covered the specific salary and demat charges attributable to the exempt income. attributable to the exempt income. Judicial Consistency: Judicial Consistency: That for subsequent years (AY (iii) That for subsequent years (AY 2018-19 and 2020 19 and 2020-21), coordinate benches have accepted that 21), coordinate benches have accepted that Rule 8D cannot be invoked when investments are made from Rule 8D cannot be invoked when investments are made from Rule 8D cannot be invoked when investments are made from interest-free own funds. free own funds.

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4.1 It is undisputed that the assessee earned exempt income It is undisputed that the assessee earned exempt income It is undisputed that the assessee earned exempt income during disallowance of ₹3,60,748/- the year and that it made a d that it made a suo-motu disallowance of towards administrative expenditure. towards administrative expenditure.

4.2 At this juncture, it is apposite to recapitulate the settled legal At this juncture, it is apposite to recapitulate the settled legal At this juncture, it is apposite to recapitulate the settled legal position governing the recording of satisfaction under section 14A(2) position governing the recording of satisfaction under section 14A(2) position governing the recording of satisfaction under section 14A(2) of the Act. The Hon’ble Supreme Court in of the Act. The Hon’ble Supreme Court in Maxopp Investment Ltd. Maxopp Investment Ltd. v. CIT (402 ITR 640) v. CIT (402 ITR 640) has held that the Assessing Office the Assessing Officer must, having regard to the accounts of the assessee, record a clear and having regard to the accounts of the assessee, record a having regard to the accounts of the assessee, record a reasoned dissatisfaction reasoned dissatisfaction with the correctness of the assessee’s claim with the correctness of the assessee’s claim that no or only a particular amount of expenditure was incurred in that no or only a particular amount of expenditure was incurred in that no or only a particular amount of expenditure was incurred in relation to exempt income. relation to exempt income. The Hon’ble Court clarified that Court clarified that the formation of such satisfaction is a formation of such satisfaction is a condition precedent condition precedent for invoking the prescribed method under Rule 8D, but the statute does not mandate prescribed method under Rule 8D, but the statute does not mandate prescribed method under Rule 8D, but the statute does not mandate any particular form or ritualistic language any particular form or ritualistic language—what is required is a what is required is a discernible nexus between discernible nexus between the accounts examined and the conclusion the accounts examined and the conclusion drawn.

4.3 The Hon’ble Supreme Court further affirmed the ratio of the The Hon’ble Supreme Court further affirmed the ratio of the The Hon’ble Supreme Court further affirmed the ratio of the Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. Godrej & Boyce Mfg. Co. Ltd. v. DCIT (394 Bombay High Court in ITR 449), wherein it , wherein it is held that once the Assessing Officer, upon once the Assessing Officer, upon examination of the accounts, records reasons for rejecting the the accounts, records reasons for rejecting the the accounts, records reasons for rejecting the assessee’s computation, the statutory machinery under Rule 8D is assessee’s computation, the statutory machinery under Rule 8D is assessee’s computation, the statutory machinery under Rule 8D is triggered.

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4.4 Tested on the anvil of the aforesaid binding precedents, we find Tested on the anvil of the aforesaid binding precedents, we find Tested on the anvil of the aforesaid binding precedents, we find that in the present case the Assessing Officer has duly discharged the that in the present case the Assessing Officer has duly discha that in the present case the Assessing Officer has duly discha statutory obligation under section 14A(2) statutory obligation under section 14A(2) of Act. The Assessing Officer . The Assessing Officer examined the accounts and specifically noted that while the assessee examined the accounts and specifically noted that while the assessee examined the accounts and specifically noted that while the assessee had disallowed certain demat charges and a portion of salary, it failed had disallowed certain demat charges and a portion of salary, had disallowed certain demat charges and a portion of salary, to apportion indirect infrastructu to apportion indirect infrastructure costs—such as rent, electricity, such as rent, electricity, necessarily utilized in managing a and senior management time and senior management time—necessarily utilized in managing a portfolio of over Rs. 40 Crores. We find that the AO’s satisfaction was portfolio of over Rs. 40 Crores. We find that the AO’s satisfaction was portfolio of over Rs. 40 Crores. We find that the AO’s satisfaction was sufficiently grounded in the fact that the Assessee’s infrastructure sufficiently grounded in the fact that the Assessee’s infrastructure sufficiently grounded in the fact that the Assessee’s infrastructure supports both taxable and exempt streams, yet the able and exempt streams, yet the suo-motu able and exempt streams, yet the disallowance remained silent on the common overheads. The reasons disallowance remained silent on the common overheads. disallowance remained silent on the common overheads. recorded are not vague or mechanical; rather, they are rooted in the recorded are not vague or mechanical; rather, they are recorded are not vague or mechanical; rather, they are financial statements and the nature of the assessee’s operations. financial statements and the nature of the assessee’s operations financial statements and the nature of the assessee’s operations

4.5 The dissatisfaction recorded is thus The dissatisfaction recorded is thus factual, reasoned, and factual, reasoned, and founded on the accounts founded on the accounts, satisfying the statutory requirement as satisfying the statutory requirement as explained by the Hon’ble Supreme Court in explained by the Hon’ble Supreme Court in Maxopp Investment Ltd. Maxopp Investment Ltd. (supra). The Assessing Officer thereafter restricted the disallowa . The Assessing Officer thereafter restricted the disallowa . The Assessing Officer thereafter restricted the disallowance to administrative expenditure under Rule 8D(2)(iii) alone, without administrative expenditure under Rule 8D(2)(iii) alone, without administrative expenditure under Rule 8D(2)(iii) alone, without making any disallowance in respect of interest expenditure—an making any disallowance in respect of interest expenditure making any disallowance in respect of interest expenditure approach approach approach that that that further further further evidences evidences evidences application application application of of of mind mind mind and and and proportionality.

4.6 In light of the authoritative pronouncements o In light of the authoritative pronouncements o In light of the authoritative pronouncements of the Hon’ble Supreme Court in Maxopp Investment Ltd. Maxopp Investment Ltd.(supra) and and Godrej & Boyce

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(supra), we hold that the satisfaction recorded by the Assessing , we hold that the satisfaction recorded by the Assessing , we hold that the satisfaction recorded by the Assessing Officer in the present case meets the legal threshold mandated under Officer in the present case meets the legal threshold mandated under Officer in the present case meets the legal threshold mandated under section 14A(2), and the consequent invocat section 14A(2), and the consequent invocation of Rule 8D cannot be ion of Rule 8D cannot be faulted.

4.7 Once dissatisfaction is validly recorded, the Assessing Officer is Once dissatisfaction is validly recorded, the Assessing Officer is Once dissatisfaction is validly recorded, the Assessing Officer is statutorily mandated to compute the disallowance in accordance with statutorily mandated to compute the disallowance in accordance with statutorily mandated to compute the disallowance in accordance with Rule 8D. The Assessee’s reliance on having "interest-free own funds" Rule 8D. The Assessee’s reliance on having "interest Rule 8D. The Assessee’s reliance on having "interest is misplaced in the context of the present disallowance. The AO has n the context of the present disallowance. The AO has n the context of the present disallowance. The AO has not made any disallowance on account of interest expenditure under made any disallowance on account of interest expenditure under made any disallowance on account of interest expenditure under Rule 8D(2)(i). The current disallowance is confined to administrative Rule 8D(2)(i). The current disallowance is confined to Rule 8D(2)(i). The current disallowance is confined to and indirect expenses and indirect expenses under Rule 8D(2)(ii) (as amended w.e.f. under Rule 8D(2)(ii) (as amended w.e.f. 02.06.2016). Therefore, the question of borrowed funds vs. own funds 06.2016). Therefore, the question of borrowed funds vs. own funds 06.2016). Therefore, the question of borrowed funds vs. own funds is rendered purely academic is rendered purely academic and does not advance its case. and does not advance its case. The Ld. CIT(A) has also ensured that the computation is aligned with the CIT(A) has also ensured that the computation is aligned with the CIT(A) has also ensured that the computation is aligned with the monthly average of investments as required by law. monthly average of investments as required by law.

4.8 We have perused the orders for AY 2018 We have perused the orders for AY 2018-19 and 2020 19 and 2020-21 cited by the Assessee. We find those orders factually distinguishable, as by the Assessee. We find those orders factually distinguishable, as by the Assessee. We find those orders factually distinguishable, as they primarily dealt with the Revenue's challenge to the quantum of they primarily dealt with the Revenue's challenge to the they primarily dealt with the Revenue's challenge to the investment to be considered (yielding vs. non investment to be considered (yielding vs. non-yielding). The yielding). They do not grant a blanket immunity from Rule 8D where the AO has identified a grant a blanket immunity from Rule 8D where the AO has identified a grant a blanket immunity from Rule 8D where the AO has identified a clear failure to apportion indirect costs. clear failure to apportion indirect costs.

4.9 We find that the Ld. CIT(A) has correctly identified that the We find that the Ld. CIT(A) has correctly identified that the We find that the Ld. CIT(A) has correctly identified that the Assessee's infrastructure, senior management, and utilities were Assessee's infrastructure, senior management, and utilities were Assessee's infrastructure, senior management, and utilities were

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utilized for the investment activity. In the absence of a convincing zed for the investment activity. In the absence of a convincing zed for the investment activity. In the absence of a convincing alternative apportionment by the Assessee that includes these alternative apportionment by the Assessee that includes these alternative apportionment by the Assessee that includes these overheads, the statutory formula provided under Rule 8D becomes overheads, the statutory formula provided under Rule 8D becomes overheads, the statutory formula provided under Rule 8D becomes the mandatory guide. the mandatory guide.

4.10 However, we note that the Ld. CIT(A) has However, we note that the Ld. CIT(A) has already directed the already directed the AO to rework the disallowance based on the AO to rework the disallowance based on the actual monthly average actual monthly average of investments rather than a simple opening/closing average. This of investments rather than a simple opening/closing average. This of investments rather than a simple opening/closing average. This direction ensures that the disallowance remains proportionate to the direction ensures that the disallowance remains proportionate to the direction ensures that the disallowance remains proportionate to the period of investment. period of investment.

4.11 Finding no infirmity in the principle of the disallowance g no infirmity in the principle of the disallowance g no infirmity in the principle of the disallowance sustained by the Ld. CIT(A), we uphold the impugned order. The AO sustained by the Ld. CIT(A), we uphold the impugned order. The AO sustained by the Ld. CIT(A), we uphold the impugned order. The AO is directed to complete the reworking as per the Ld. CIT(A)'s is directed to complete the reworking as per the Ld. CIT(A)'s is directed to complete the reworking as per the Ld. CIT(A)'s instructions.

4.12 All the grounds of the appeal of the assessee are All the grounds of the appeal of the assessee are All the grounds of the appeal of the assessee are accordingly dismissed.

Order pronounced in the open Court on ounced in the open Court on 09/02/2026. /02/2026. Sd/- Sd/- (KAVITHA RAJAGOPAL KAVITHA RAJAGOPAL) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 09/02/2026 M. Ranganath Vittal , Sr. P.S.

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Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai