Dismissed¶37

The Pr Commissioner of Income Tax and Another v. M/S Coffee Day Enterprises Ltd.

Karnataka HC18 Nov 2025ITA/42/2025

Case brief

AI extract

What is this about?

Pr. Commissioner of Income Tax Central and DCIT Central Circle-1(3), Bengaluru (Revenue/appellants) v. M/s Coffee Day Enterprises Ltd (assessee/respondent) — Karnataka HC ITA No. 42 of 2025, decided 18-11-2025 — AY 2016-17 — disallowance Section 14A r.w. Rule 8D of the Income Tax Rules — Circular No.5/2014 dated 11.02.2014 — ITAT Bengaluru order dated 23.07.2024 in ITA No.782/Bang/2024 (batch ITA No.780-785/Bang/2024) — parity of reasoning with ITA No.2/2020 (AY 2013-14, assessee's own case) — substantial questions answered in favour of the assessee — appeal dismissed.

What did the court decide?

None to the Revenue-appellants; the substantial questions are answered in favour of the Assessee and the appeal is disposed of, leaving the Tribunal's order in ITA No.782/Bang/2024 standing. ¶37

The Pr Commissioner of Income Tax and Another Vs M/S Coffee Day… — Income Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

None to the Revenue-appellants; the substantial questions are answered in favour of the Assessee and the appeal is disposed of, leaving the Tribunal's order in ITA No.782/Bang/2024 standing.

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Issue for consideration

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in not considering Circular No.5/2014 dated 11.02.2014 on the issue of disallowance under Section 14A r.w. Rule 8D. +1 more

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Court's answer

Substantial question 1 is answered in favour of the Assessee: for parity of reasoning with the Court's dismissal of the Revenue's appeal ITA No.2/2020 (AY 2013-14, assessee's own case) on the same questions, this appeal must also be dismissed.

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Ratio / Principle

Substantial question 2 is likewise answered in favour of the Assessee, the Court adopting the answer given in ITA No.2/2020 for parity of reasoning; the appeal is therefore dismissed.

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Detailed headnote1 paragraphs

Karnataka HC, Bengaluru — ITA No. 42 of 2025 (NC: 2025:KHC:47765-DB), decided 18-11-2025 — Coram: B M Shyam Prasad and T.M. Nadaf, JJ. (judgment per B M Shyam Prasad, J.). Revenue's appeal under Sec. 260-A of the Income Tax Act 1961 against the order dated 23.07.2024 of the ITAT, Bengaluru in ITA No.782/Bang/2024 (AY 2016-17; part of batch ITA No.780-785/Bang/2024), which confirmed the Appellate Commissioner's order; the dispute concerned disallowance computed by the Assessing Officer under Rule 8D of the Income Tax Rules applying Section 14A of the Income Tax Act, 1961. Substantial questions admitted on (i) the Tribunal's non-consideration of Circular No.5/2014 dated 11.02.2014 and (ii) the Tribunal's deletion of the addition on disallowance. Noting that the Revenue's earlier appeal ITA No.2/2020 (AY 2013-14) in the assessee's own case on the same questions had been dismissed with answers in the assessee's favour, the Court, for parity of reasoning, answered the substantial questions in favour of the Assessee and dismissed the appeal.

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NC: 2025:KHC:47765-DB ITA No. 42 of 2025

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^TH DAY OF NOVEMBER, 2025

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PRESENT

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THE HON'BLE MR. JUSTICE B M SHYAM PRASAD

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AND

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THE HON'BLE MR. JUSTICE T.M.NADAF

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INCOME TAX APPEAL NO. 42 OF 2025

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BETWEEN:

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THE PR. COMMISSIONER OF INCOME TAX AND ANOTHER CENTRAL, 3^RD FLOOR, C.R. BUILDING, QUEENS ROAD, BENGALURU-560 001.

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Digitally signed by REKHA R Location: High Court of Karnataka

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THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(3), 3^RD FLOOR, C.R BUILDING, QUEENS ROAD, BENGALURU-560 001.

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…APPELLANTS

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(BY SRI. Y V RAVIRAJ.,ADVOCATE A/W SRI. M. DILIP., ADVOCATE)

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2 - NC: 2025:KHC:47765-DB ITA No. 42 of 2025

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HC-KAR

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AND:

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M/S COFFEE DAY ENTERPRISES LTD NO.23/2, COFFEE DAY SQUARE, VITTAL MALLYA ROAD, BENGALURU-560 001. REP BY ITS MANAGING DIRECTOR.

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…RESPONDENT

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(BY MS. TANMAYEE RAJKUMAR.,ADVOCATE)

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THIS INCOME TAX APPEAL IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.782/BANG/2024 DATED 23.07.2024 FOR ASSESSMENT YEAR 2016-17 ANNEXURE A CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(3), BENGALURU.

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THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF

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3 - NC: 2025:KHC:47765-DB ITA No. 42 of 2025

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HC-KAR

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ORAL JUDGMENT

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(PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD)

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The Revenue's appeal is as against the order dated 23.07.2024 in ITA No.780-785/Bang/2024. These orders relate to the assessment years 201112, 2015-16, 2016-17, 2017-18, 2018-19 and 202021, and the dispute is over the disallowance computed by the Assessing Officer under Rule 8D of the Income Tax Rules applying Section 14A of the Income Tax Act, 1961. This appeal is admitted for consideration of the following substantial questions of law:

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"1. Whether on the facts and in the circumstances of the case, the Tribunal was correct in not considering the Circular No.5/2014 dated 11.02.2014 on the issue of disallowance under Section 14A r.w. Rule 8D.

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2. Whether on the facts and circumstances of the case, the Tribunal was correct in deleting the addition on disallowance under Section 14 r.w. Rule 8D?

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4 - NC: 2025:KHC:47765-DB ITA No. 42 of 2025

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HC-KAR

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It is undisputed that the Revenue's appeal in ITA No.2/2020 in the Assessee's own case relevant to

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the assessment year 2013-14, on the same set of questions, is dismissed answering the questions in favour of the Assessee in the light of this Court's order in the aforesaid appeal. On perusal of the records, this Court opines that for parity of reasoning this appeal must also be dismissed holding that the substantial questions proposed are answered in favour of the Assessee as is opined in the appeal in ITA No.2/2020.

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The appeal is disposed of accordingly.

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Sd/(B M SHYAM PRASAD) JUDGE

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Sd/(T.M.NADAF) JUDGE

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SA ct:sr

The Pr Commissioner of Income Tax and Another v. M/S Coffee Day Enterprises Ltd.

Case brief

What is this about?

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The Pr Commissioner of Income Tax and Another v. M/S Coffee Day Enterprises Ltd.

Case brief

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What the court decided

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