IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 4406/MUM/2024 Assessment Year: 2018-19 Bombay Oxygen Investments Commissioner of Income-tax, Ltd., Mumbai

22/B, Mittal Tower, Vs.

210, Nariman Point, Mumbai – 400021 (PAN : AAACB1753A)

(Appellant) (Respondent)

Present for:

Assessee : Shri Ronak Doshi, CA Revenue : Ms. Monika H. Pande, Sr. AR Date of Hearing : 09.12.2024 Date of Pronouncement : 27.02.2025 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of Ld.

CIT(A), National Faceless Appeal Centre (NFAC), vide order no. ITBA/NFAC/S/250/2023-24/1063470469(1), dated 27.03.2024 passed against the assessment order by National Faceless Assessment Centre, Delhi, u/s. 143(3) r.w.s. 144B of the Income-tax Act (hereinafter referred to as the “Act”), dated 14.09.2021 for Assessment Year 2018-19.

2. Grounds taken by the assessee are reproduced as under:

“1. On the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) through National Faceless Appeal Centre, ["the CIT(A)"] erred in partly upholding action of AO of making disallowance u/s.14A of the Income Tax Act 1961 ("the Act").

The Appellant prays that the disallowance u/s.14A made by AU be restricted to suo moto disallowance made by the Appellant.

2. On the facts and in law, the CIT(A) erred in upholding disallowance made by AO u/s.14A while computing book profit u/s.115JB of the Act.

The Appellant prays that it be held that while computing book profits u/s.115JB, only actual expenditure, if any for earning exempt income be added back and Rule 8D cannot apply.”

3. There is a delay of 93 days noted by Registry in filing the present appeal before the Tribunal for which petition for condonation of delay along with affidavit is placed on record. Perusal of the same states that delay is attributable to change in the management staff of the assessee. We have considered the petition for condonation of the said delay along with an affidavit. Upon perusal of the same and hearing both sides, we deem it fit to condone the delay on the ground that there was sufficient cause for the said delay. Accordingly, we condone the delay to take up the matter for adjudication.

4. Twin issues involved in respect of disallowance made under section 14A are towards disallowance made while computing assessed income under the normal provisions of the Act as well as adjustment made while computing book profit under section 115JB of the Act.

5. Brief facts of the case are that assessee is engaged in manufacturing and trading of industrial gases such as oxygen, nitrogen and argon. Assessee also invested substantial amount in mutual funds and equity shares of different companies. Assessee filed its return of income on 31.10.2018, reporting total income at ₹5,15,00,586/- under normal provisions and ₹7,83,67,104/- under

115JB of the Act. During the year, assessee had earned dividend income of ₹72,84,630/- from certain investments in equity shares which was claimed exempt under section 10(34). Assessee computed suo moto disallowance of ₹17,21,138/- under section 14A as proportion of salary and administrative expenses charged to its profit and loss account. During the assessment proceedings, assessee submitted the working of suo moto disallowance made by it along with explanation on the same. The said working forming part of the paper book at page 23 is extracted below for ready reference.

5.1. Ld. Assessing Officer observed that considering the amount of dividend income received and the nature of business of the assessee, disallowance offered by the assessee under section 14A was found not to be reasonable. According to him, suo moto offering of disallowance under section 14A suggests that the provisions of section 14A are applicable in the case and that the disallowance offered by the assessee is computed without any logic and reasoning