We propose a novel theoretical model to describe a physical identity of the soft X-ray excess, ubiquitously detected in many Seyfert galaxies, by considering a steady-state, axisymmetric plasma accretion within the innermost stable circular orbit (ISCO) around a black hole (BH) accretion disk. We extend our earlier theoretical investigations on general relativistic magnetohydrodynamic (GRMHD) accretion which has implied that the accreting plasma can develop into a standing shock for suitable physical conditions causing the downstream flow to be sufficiently hot due to shock compression. We numerically calculate to examine, for sets of fiducial plasma parameters, a physical nature of fast MHD shocks under strong gravity for different BH spins. We show that thermal seed photons from the standard accretion disk can be effectively Compton up-scattered by the energized sub-relativistic electrons in the hot downstream plasma to produce the soft excess feature in X-rays. As a case study, we construct a three-parameter Comptonization model of inclination angle $theta_{rm obs}$, disk photon temperature $kT_{rm in}$ and downstream electron energy $kT_e$ to calculate the predicted spectra in comparison with a 60 ks {it XMM-Newton}/EPIC-pn spectrum of a typical radio-quiet Seyfert 1 AGN, Ark~120. Our $chi^2$-analyses demonstrate that the model is plausible in successfully describing data for both non-spinning and spinning BHs with the derived range of $61.3~{rm keV} lesssim kT_e lesssim 144.3~{rm keV}$, $21.6~{rm eV} lesssim kT_{rm in} lesssim 34.0~{rm eV}$ and $17.5degr lesssim theta_{rm obs} lesssim 42.6degr$ indicating a compact Comptonizing region of $3-4$ gravitational radii that resembles the putative X-ray coronae.
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