IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “G” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. A.Y. Appellant Respondent Deputy Commissioner of Income Tax, 5329/Mum/2024 2015-16 Circle-1(1)(2), GRN Finsec Private 533, 5th Floor, Limited, Aayakar Bhavan, 815, Tulsiani Chambers, Maharshi Karve Road, 212, Nariman Point, Mumbai-400020.

Mumbai-400021. Asst.

[PAN: AAFCM2069R] Commissioner of

5341/Mum/2024 2016-17 Income Tax, Aayakar Bhavan, Maharshi Karve Road, Mumbai-400020.

Assessee by : Shri Madhur Agrawal &

Shri Fenil Bhatt Revenue by : Shri Swapnil Choudhary Date of Hearing : 29-07-2025 Date of Pronouncement : 26-08-2025

O R D E R

PER VIKRAM SINGH YADAV, A.M :

These are two appeals filed by the assessee against the respective orders of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], pertaining to Assessment Years (AY) 2015-16 & 2016-17. Since common issues are involved in these appeals, both these appeals were heard together and are being disposed-off by way of this consolidated order.

2. In ITA No. 5329/Mum/2024, for the AY. 2015-16, the assessee has taken the following grounds of appeal:

“Ground No. 1:

On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre has erred in disallowing proportionate interest expenditure of Rs. 12,65,097/-u/s.36(1) (iii) of the I.T. Act with respect to investments made during the year. The investments have been made through owned funds available with the company and no part of borrowed funds have been utilised. The disallowance of interest is based on assumptions/surmises and without any evidences on record. It is therefore prayed that the disallowance of interest u/s.36(1)(iii) of Rs. 12,65,097 may please be deleted.

Ground No. 2:

On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre has erred in confirming the disallowance of Rs. 78,83,103/-made under section 14A of the Income Tax Act, 1961 r.w. Rule 8D. The appellant prays that disallowance of Rs.78,83,103/- made by the A.O. may please be deleted and suo-moto disallowance offered by the appellant at Rs. 1,77,078/- may please be accepted.

Ground No. 3 On the facts and in the circumstances of the case and in law, and without prejudice to contentions as per Ground No.2, the Ld. AO erred in taking the value of the stock- in-trade while calculating the disallowance u/s.14A r.w.r. 8D. The stock-in-trade is a business asset and quite distinct and different from the investments and therefore, value of the stock-in-trade should not have been considered while calculating the disallowance under Rule 8D(2)(ii) and (iii) of I.T. Rules. Under this Rule, value of investment alone is considered for disallowance u/s. 14A r.w.r. 8D and not stock-in-trade. It is therefore prayed that AO may be directed to exclude the value of stock-in-trade while calculating the disallowance u/s. 14A r.w.r. 8D.

Ground No. 4:

On the facts and in the circumstances of the case and in law, and without prejudice to contentions as per Ground Nos. 2, the AO erred in considering interest expenditure while calculating the disallowance u/s 14A rwr. 8D without considering the fact that the interest is paid for the borrowings taken for the business purpose and investments have been made from owned funds. It is prayed that the disallowance of interest under Rule 8D(2)(ii) may please be deleted Ground No. 5 On the facts and circumstances of the case and in law and without prejudice to ground no. 2, the appellant submits that in computing the disallowance under section 14A read with Rule 8D, only those investments on which dividend has been received ought to have been considered.

Ground No. 6 On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre has erred in computing the disallowance of Rs 78,83,103/- u/s 14A r.w.s. 8D of the IT Rules, 1962 while computi