Principal Commissioner of Income Tax, Vadodara-4 V. Panchmahal Dist. Co-operative Milk Union Ltd

TAXAP/1308/2018

AI Insights

The case involves the Principal Commissioner of Income Tax, Vadodara-4, as the appellant, contesting the decision of the Income Tax Appellate Tribunal, which had deleted the disallowance of certain expenses claimed by the Panchmahal Dist. Co-operative Milk Union Ltd. The expenses in question were related to Animal Breeding & Co-operative Development, which the assessing officer had initially treated as capital expenditure. The Tribunal's decision was based on a precedent set in a similar case involving Gujarat Co-operative Milk Marketing Federation Ltd., which was also upheld by the High Court in earlier tax appeals. The High Court, referencing its previous judgments, affirmed the Tribunal's decision, stating that the expenses were general in nature and aimed at improving fertility practices among milk animals, thus not directly correlatable to tangible returns.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 802984 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 03-12-2018
• Assessment Year: misc
• Other Referred Cases: Gujarat Co-operative Milk Marketing Federation Ltd. vs. Income Tax, Tax Appeal No.1266 of 2018, Tax Appeal No.1267 of 2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: VARUN PATEL
• Keywords: Animal Breeding & Co-operative Development Expenses; Assessment years; Capital expenditure; Income Tax
• Section: 260A

Judgement Text

"C/TAXAP/1307/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1307 of 2018 With R/TAX APPEAL NO. 1308 of 2018 With R/TAX APPEAL NO. 1309 of 2018 ================================================================ PRINCIPAL COMMISSIONER OF INCOME TAX, VADODARA-4 Versus THE PANCHMAHAL DIST. CO-OPERATIVE MILK(SIC) UNION LTD =============================================================== Appearance: MR.VARUN K.PATEL(3802) for the APPELLANT for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE DR.JUSTICE A. P. THAKER Date : 03/12/2018 ORAL COMMON ORDER (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. All these appeals filed by the revenue under section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) are directed against the common order dated 13.04.2018 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench “A” (hereinafter referred to as “the Tribunal”) in ITA No.2519/Ahd/2015, ITA No.3036/Ahd/2013 and ITA No.2759/Ahd/2013 for assessment years 2008-09, 2010-11 and 2011-12 respectively, by proposing the following common question stated to be a substantial question of law: “Whether on the facts and in the circumstances of the case, the learned ITAT has erred in law and on facts in confirming the deletion of disallowance of Animal Page 1 of 3 C/TAXAP/1307/2018 ORDER Breeding & Co-operative Development Expenses of Rs.1,12,57,956/- made by the assessing officer as capital expenditure?” 2. Mr. Varun Patel, learned senior standing counsel reiterated the grounds stated in the memorandum of appeal and has also relied on the reasoning adopted by the Assessing Officer in the assessment order. 3. A perusal of the impugned order passed by the Tribunal reveals that in paragraph 3.6 thereof, the Tribunal has noted that the CIT (Appeals) has followed the decision of the first appellate authority in the case of Gujarat Co-operative Milk Marketing Federation Ltd. relevant to assessment year 2008- 09, which was carried before the Tribunal and was decided in favour of the assessee in ITA No.1977/Ahd/2012 read with Miscellaneous Application No.118/Ahd/2017. The Tribunal maintaining the parity with the decision of the Coordinate Bench, has accordingly found no reason to interfere with the order passed by the Commissioner (Appeals). 4. The decision of the Tribunal in the case of Gujarat Co- operative Milk Marketing Federation Ltd. came to be carried in further appeal before this court in Tax Appeal No.1266 of 2018 and Tax Appeal No.1267 of 2018. This court vide order dated 22.10.2018, affirmed the orders passed by the Tribunal by holding that the expenditure was general in nature and aimed at improving the practices for better fertility amongst milk animals by addressing the issues which caused infertility. The expenditure, therefore, was for the purpose of its business and would not be co-relatable to any tangible returns which can be Page 2 of 3 C/TAXAP/1307/2018 ORDER expected out of such expenditure. 5. In the above premise, for the reasons recorded in the order dated 22.10.2018 passed by this court in Tax Appeal No.1266 of 2018 and Tax Appeal No.1267 of 2018, this court is of the view that the impugned order passed by the Tribunal does not give rise to any question of law, much less a substantial question of law. 6. The appeals, therefore, fail and are accordingly dismissed. (HARSHA DEVANI, J) (A. P. THAKER, J) B.U. PARMAR Page 3 of 3 "