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2016 (2) TMI 1229 - HC - Income TaxDisallowance u/s 14A read with Rule 8D - ITAT deleted the addition as relying on HOLCIM INDIA P. LTD. 2014 (9) TMI 434 - DELHI HIGH COURT - revenue submits that the decision of this Court requires reconsideration by a larger Bench particularly in light of Circular No. 5/2014 of CBDT dated 11th February 2014 - HELD THAT - The judgment in CIT v. Holcim India (P) Ltd. (supra) was delivered on 5th September 2014, the Court is not persuaded to accept the above plea of the Revenue. In any event, the circular of CBDT cannot possibly override a binding decision of the Court. Also the decision in CIT v. Holcim India (P) Ltd. (supra) was not challenged by the Revenue. - No substantial question of law
Issues:
- Appeal by Revenue against ITAT order - Deletion of disallowance under Section 14A of the Act - Reliance on previous court decision - Request for reconsideration by a larger Bench - Validity of Circular No. 5/2014 of CBDT - Court's decision and dismissal of appeal Analysis: The High Court heard an appeal by the Revenue against an order of the Income Tax Appellate Tribunal (ITAT) for the Assessment Year 2009-10. The main issue revolved around the deletion of a disallowance of &8377;1,36,94,050 under Section 14A of the Income Tax Act read with Rule 8D of the Income Tax Rules, 1962. The ITAT based its decision on a previous court judgment in CIT v. Holcim India (P) Ltd. The Revenue argued for a reconsideration by a larger Bench, citing Circular No. 5/2014 of the Central Board of Direct Taxes dated 11th February 2014. The Court, after hearing the arguments, found no merit in the Revenue's plea for reconsideration. It noted that the judgment in CIT v. Holcim India (P) Ltd. was not challenged by the Revenue and that a circular from CBDT cannot override a binding court decision. The Court emphasized that the decision in question was delivered before the circular and, therefore, the circular could not be applied retroactively to change the outcome. Ultimately, the Court concluded that no substantial question of law arose for determination in this case and dismissed the appeal accordingly.
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