ACIT ANAND CIRCLE ANAND, ANAND V. GUJARAT CO OPERATIVE MILK MARKETING FEDERATION LTD, ANAND

ITA 1455/AHD/2025

AI Insights

The case involves multiple appeals by the Revenue against the Gujarat Co-operative Milk Marketing Federation Ltd. concerning the classification of 'Co-operative and Breed Development Expenses' as either revenue or capital expenditures for the assessment years 2016-17, 2018-19, 2020-21, 2021-22, and 2022-23. The Tribunal examined whether these expenses, which amounted to significant sums each year, were directly related to the business activities of the assessee and whether they provided enduring benefits, thus qualifying them as capital expenditures. The Tribunal's decision was influenced by previous rulings from the Gujarat High Court, which had consistently held similar expenditures as revenue in nature, emphasizing their role in enhancing productivity and supporting business activities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 823055 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 18-07-2025
• Other Referred Cases: R/Tax Appeal Nos.1266 & 1267 of 2018, R/Tax Appeal No.401 of 2019, R/Tax Appeal No.102 of 2019, R/Tax Appeal No.101 of 2019, ITA No.521/Ahd/2017, ITA No.2800/Ahd/2017, ITA No.3023/Ahd/2014, ITA No.3037/Ahd/2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHER SINGH
• Assessee Lawyers: DHINAL SHAH
• Keywords: Revenue expenditure

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “डी“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD \u0016ी संजय गग\u001b, \u0011ाियक सद एवं \u0016ी मकरंद वसंत महादेवकर, लेखा सद क े सम\"। ] ] Before Shri Sanjay Garg, Judicial Member And Shri Makarand V. Mahadeokar, Accountant Member Sl. No(s) आयकर अपील सं/ ITA No(s) िनधा \u0010रण वष\u0010/ Assess- ment Year(s) Appeal(s) by : अपीलाथ$ / %&थ$ / Appellant बनाम/vs. Respondent 1. 1455/Ahd/2025 2016-17 The ACIT Anand Circle Anand – 388 001 (Revenue) Gujarat Co-operative Milk Marketing Federation Ltd. Post Box No.10, Amul Diary Road Anand – 388 001 PAN: AAAAG 5588 Q (Assessee) 2. 1456/Ahd/2025 2018-19 Revenue Assessee 3. 1457/Ahd/2025 2020-21 Revenue Assessee 4. 1458/Ahd/2025 2021-22 Revenue Assessee 5. 1459/Ahd/2025 2022-23 Revenue Assessee Assessee by : Shri Dhinal Shah, AR Revenue by : Shri Sher Singh, CIT-DR सुनवाई की तारीख/Date of Hearing : 30 /09/2025 घोषणा की तारीख /Date of Pronouncement: 23/12/2025 आदेश/O R D E R Per Sanjay Garg, Judicial Member: The captioned appeals have been preferred by the Revenue against the separate orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] of Printed from counselvise.com ITA Nos.1455 to 1459/Ahd/2025 ACIT Anand vs. Gujarat Co-operative Milk Marketing Federation Ltd. AYs : 2016-17, 2018-19, 2020-21, 2021-22 & 2022-23 respectively 2 pertaining to different Assessment Years (AYs). Since common facts and issues are involved in all these appeals, these were heard together and are being disposed of by this common order for the sake of convenience. 2. The common issue involved in all these appeals is “whether the ‘Co- operative and Breed Development Expenses’ incurred by the assessee are revenue expenditure or capital in nature.” 2.1. Brief facts of the case are that the assessee is a Co-operative Society and derives income from business and profession and other sources. The assessee Co-operative Society is also engaged in marketing and manufacturing of milk and milk products and Polythene Packing Films, running its business under the name and style “Gujarat Co-operative Milk Marketing Federation Ltd.”. The assessee incurred an expenditure of Rs.35,95,36,577/- under the head “co-operative and breed development” for AY 2016-17, a sum of Rs.13,86,93,000/- in AY 2018-19, a sum of Rs. 13,49,47,339/- in AY 2020-21, a sum of Rs.16,84,61,365/- in AY 2021-22 and a sum of Rs.20,35,21,270/- in AY 2022-23. 2.2. The case of the assessee is that the said expenditure has been incurred by way of giving funds/assistance to village, district and state level co- operative milk producers’ societies for the purpose of conducting programmes with an objective of imparting education, training and information for development and strengthening the co-operative structure as well as towards fertility improvement programme and thereby increasing milk productivity. The case of the Assessing Officer, however, is that the said expenditure is neither directly related to the business activities of the assessee Printed from counselvise.com ITA Nos.1455 to 1459/Ahd/2025 ACIT Anand vs. Gujarat Co-operative Milk Marketing Federation Ltd. AYs : 2016-17, 2018-19, 2020-21, 2021-22 & 2022-23 respectively 3 nor the same is revenue in nature as the same has enduring benefits and, hence, the same is capital in nature. 3. The Ld. CIT(A), while relying upon the decisions of the Tribunal as well as that of the Hon’ble Jurisdictional Gujarat High Court on the identical issue in earlier assessment years in the case of the assessee, has held that the said expenditure is of revenue in nature and deleted the disallowance so made by the AO. 4. We find that the issue is squarely covered by the decision of Hon’ble Jurisdictional Gujarat High Court in the own case of the assessee for AY 2008- 09 vide order dated 22/10/2018 passed in R/Tax Appeal Nos.1266 & 1267 of 2018, wherein the Hon’ble Gujarat High Court noted the nature of the expenditure and objectives of the same and also the activities carried out by the assessee. It was pleaded before the Hon’ble Gujarat High Court that the activities carried out by the assessee were aimed at fertility improvement which ultimately results in increasing the milk production and thereby increasing the business activity of the assessee. The Hon’ble High Court held that such nature of expenditure incurred by the assessee was for the business purpose of the assessee and upheld the order of the Tribunal dismissing the appeal of the Revenue on this issue. The said order has been further followed by the Hon’ble Jurisdictional High Court for AY 2009-10 vide order dated 03/12/2019 passed in R/Tax Appeal No.401 of 2019 holding such expenditure incurred towards fertility improvement programme was revenue in nature and not capital in nature. The same view has been further affirmed by the Hon’ble Jurisdictional High Court for AY 2011-12 vide order dated 18/06/2019 in R/Tax Appeal No.102 of 2019 in the case of the assessee Printed from counselvise.com ITA Nos.1455 to 1459/Ahd/2025 ACIT Anand vs. Gujarat Co-operative Milk Marketing Federation Ltd. AYs : 2016-17, 2018-19, 2020-21, 2021-22 & 2022-23 respectively 4 itself. Similar view has been taken by the Hon’ble Gujarat High Court in the case of the assessee in relation to R/Tax Appeal No.101 of 2019 vide order dated 18/06/2019 for AY 2012-13. Even for AY 2013-14, the Co-ordinate Bench of the Tribunal has decided the issue in favour of assessee vide order dated 30/04/2021 in ITA No.521/Ahd/2017. Even the said issue has also been decided by the Co-ordinate Bench of the Tribunal in favour of the assessee in assessee’s own case for AY 2014-15 vide order dated 09/10/2019 in ITA No.2800/Ahd/2017, the relevant part of the order of the Tribunal for AY 2014-15 is reproduced as under: “As per Ground Nos. 1.1 & 1.2, the Revenue seeks to challenge the action of the CIT(A) for disallowance of co-operative expenses including breed development expenses etc. As pointed out on behalf of the assessee, the issue is squarely covered in favour of the assessee in its own case in AY 2011-12 by the decision of the co-ordinate bench of same combination in ITA No. 3023/Ahd/2014 & Ors. dated 02.08.2018. The relevant operative para of the order of the Tribunal in ITA No.3023/Ahd/2014 concerning AY 2011-12 is reproduced hereunder: \"11. We have carefully considered the rival submissions. The controversy revolves around maintainability of breed improvement expenses as revenue expenditure. It is broadly the case of the assessee that it is an institution created by the milk producers themselves to safeguard their interest economically, socially as well as democratically. The expenses have been incurred to optimize the productivity and quality of the milk and milk products. For this purpose, the assessee has incurred expenses towards fertility improvement programme and has inter alia taken educational programme with the object of imparting education, training and information for development and strengthening the co-operative structure and thereby improving milk productivity. In the process to achieve such objects, the assessee has incurred expenditure to the tune of Rs.824.94 Lakhs which is in the nature of revenue expenditure to improve the quality and bring efficiency in production as well as to achieve unfettered supply. In this background, the CIT(A) observed that identical issue involved in preceding assessment years have been decided in favour of the assessee by the predecessor CIT(A) and the claim of such expenditure was accepted as revenue expenditure. As noticed, the view taken by the CIT(A) has been endorsed by the co-ordinate bench of ITAT in ITA No.3037/Ahd/2010 & Ors. read with M.A. No. 07/Ahd/2017 Printed from counselvise.com ITA Nos.1455 to 1459/Ahd/2025 ACIT Anand vs. Gujarat Co-operative Milk Marketing Federation Ltd. AYs : 2016-17, 2018-19, 2020-21, 2021-22 & 2022-23 respectively 5 & Ors. (supra). In consonance with the order of the co-ordinate bench for earlier assessment years in own case of Assessee in own case of Assessee, we do not see any warrant to interfere with the order of the CIT(A).” 5. The Ld.DR has fairly admitted that the issue is squarely covered in favour of the assessee by several decisions of the Hon’ble Jurisdictional Gujarat High Court. We, therefore, respectfully following the same, do not find any merit in the appeals of the Revenue and the same are, accordingly, dismissed. 6. At this stage, it is relevant to mention here that the Ld.AR of the assessee has submitted that for AY 2011-22 there was refund due to the assessee and, therefore, the AO was not justified in levying the interest u/s.234A of the Act in respect of the disallowances/additions made. May it be so, since by our this order, the impugned additions stand deleted, we are not inclined at this stage to go into this issue. 7. In view of our above observations, all the appeals of the Revenue stand dismissed. Order pronounced in the Open Court on 23 /12/2025. Sd/- Sd/- (Makarand V. Mahadeokar) Accountant Member ( Sanjay Garg ) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 23/12/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS Printed from counselvise.com ITA Nos.1455 to 1459/Ahd/2025 ACIT Anand vs. Gujarat Co-operative Milk Marketing Federation Ltd. AYs : 2016-17, 2018-19, 2020-21, 2021-22 & 2022-23 respectively 6 आदेश की !ितिलिप अ\"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ$ / The Appellant 2. !%थ$ / The Respondent. 3. संबंिधत आयकर आयु& / Concerned CIT 4. आयकर आयु& ) अपील ( / The CIT(A)- (NFAC), Delhi 5. िवभागीय !ितिनिध , अिधकरण अपीलीय आयकर , अहमदाबाद /DR,ITAT, Ahmedabad. 6. गाड\u0010 फाईल / Guard file. आदेशानुसार/ BY ORDER, स%ािपत !ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (dictation pad is attached with the file)) : 11.12.2025 2. Date on which the typed draft is placed before the Dictating Member. : 12.12.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 24.12.25 7. Date on which the file goes to the Bench Clerk. : 24.12.25 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : Printed from counselvise.com "