IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No.7496/Mum/2025 (Assessment year: 2016-17) SA No. 157/Mum/2025 (Assessment year: 2016-17)

The Shri Hari Trust vs Assistant Commissioner of

10^th floor, Piramal Tower, Income-tax, Circle 21(3)

Ganpatrao Kadam Marg, Piramal Chamber, Lal Baug, Parel, Lower Parel (West), Mumbai- Mumbai-400012

400013 PAN:AABTT1794R APPELLANT RESPONDENT Assessee by : Shri Ronak Doshi, Respondent by : Shri Ritesh Misra (CIT DR)

Date of hearing : 22/01/2026 Date of pronouncement : 09/02/2026 O R D E R Per: Anikesh Banerjee (JM):

The instant appeal of the assessee filed against the order of the NFAC, Delhi [for brevity ‘the Ld. CIT(A)], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for assessment year 2016-17, date of order 14.10.2025. The impugned order emanated from the order of the Ld. Assistant Commissioner of Income Tax, Circle-21(3), Mumbai (for brevity the “Ld. AO”), order passed under section 143(3) of the Act, date of order 30.12.2018.

2. The assessee has taken the following grounds.

GROUND NO. I: DISALLOWANCE UNDER SECTION 14A OF THE ACT R.W. RULE 8D OF THE INCOME TAX RULES, 1962 ("the Rules"):

“1. On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in invoking section 14A of the Act and thereby computing the total disallowance of Rs. 43,23,20,191/- u/s 14A of the Act read with Rule 8D of the Rules including Rs. 18,28,43,063/- suo moto disallowed by the Appellant.

2. The Appellant prays that in absence of any exempt income earned during the year and even otherwise under law, no disallowance u/s 14A of the Act is warranted and accordingly the AO be directed to delete the entire disallowance u/s 14A of the Act including the suo moto disallowance made by the Appellant.

GROUND NO. II: LEVY OF INTEREST UNDER SECTION 234B OF THE ACT AMOUNTING TO RS.

2,04,46,470/-

1. On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of AO in levying interest u/s. 234B of the Act amounting to Rs. 2,04,46,470/-.

2. The Appellant prays that the levy of interest u/s. 234B of the Act be deleted.”

3. The brief facts of the case are that the assessee E-filed its return by declaring total income Rs.23,11,834/-. The case was selected for scrutiny under CASS. Accordingly, the notice was duly served to the assessee. The Ld. AO found that the assessee suo moto disallowed the expenses Rs.18,28,62,017/- directly relating to the income which is not part of the total income u/sec. 14A read with rule 8D(ii) of the Income-tax Rule, 1962 (the “Rule”). During the assessment the Ld. AO recalculated and found that amount to Rs.43,23,20,191/- is also liable to be disallowed related to interest expenditure u/sec. 8D(2)(ii) of the Act. After giving due credit of suomotu disallowance by the assessee the balance amount of Rs.24,94,58,174/- is added back with the total income under sec 14A r.w.r. 8D of the Act. The assessee during the impugned assessment made the submission that the assessee wrongly made the suomotu disallowance Rs.18.25/-crore u/sec. 14A. Considering the fact, the assessee had not earned any exempted income during the impugned assessment year and accordingly, no addition related to section 14A in absence of exempted income is un called for. During the hearing the Ld. AR invited the assessee’s submission and observations of the Ld. AO in impugned assessment year in page no.10 and 11 is duly reproduced as below:

“4.13 The assessee's submission is considered and the assessee vide show case dated

26.12.2018 asked asto why disallowance u/s 14A should not be made asper following calculation in hiscase:

".........Computation of disallowance uls 14A:

(i) Amount of expenditure directly relating to income which does not form part of total income = Rs.18.28.62.017/-

(ii) A=432320191 B5829499991.5 C10758388593