GUJARAT CO.OP.MILK MARKETING FEDERATION LTD.,ANAND vs. THE JT.CIT.,ANAND CIRCLE, ANAND

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ITA 674/AHD/2014Status: DisposedITAT Ahmedabad12 October 2017AY 2010-113 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal, following its co-ordinate bench decisions in identical matters for earlier assessment years, upheld the disallowances made by the lower authorities for the reserved fund and Section 14A. It also rejected the Revenue's appeal regarding co-operative development expenses.

What were the facts?

The assessee, Gujarat Co-Op. Milk Marketing Federation Ltd., filed appeals against the disallowance of amounts transferred to a reserved fund and disallowance under Section 14A. The Revenue also filed an appeal against the reversal of disallowance for co-operative development expenses.

What were the issues?

Whether amounts transferred to a reserved fund and co-operative development expenses are deductible. Whether disallowance under Section 14A is justified.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH AHMEDABAD

Before: SHRI PRAMOD KUMAR, & SHRI S. S. GODARA. &

Hearing: 10.10.2017Pronounced: 12.10.2017

PER S. S. GODARA, JUDICIAL MEMBER

The assessee and Revenue have filed instant cross appeals for assessment year 2010-11 arises against the CIT(A)- IV, Baroda’s order dated 24.01.2014, in case no. CAB/IV-A-234/2012-13, in proceedings u/s. 143(3) of the Income Tax Act, 1961; in short “the Act”. Heard both sides. Case file perused.

2.

We come to assessee’s appeal ITA No.674/Ahd/2014 first. Its first substantive ground pleads that both the lower authorities have erred in disallowing an amount of Rs.5,97,16,371/- has transferred to reserved fund u/s.67 of the Gujarat Co-operative Societies Act. We find that the CIT(A) has followed his lower appellate order in assessment year 2002-03 & 2006-07 in affirming Assessing Officer’s action disallowing the impugned sum. Mr. Talati files before us co- ordinate bench decision in assessee’s own cases for assessment years 2005-06, 2007-08 to 2009-10 decided on 30.09.2016 upholding identical disallowance in said earlier assessment years. We therefore find no reason to adopt a different approach in the impugned assessment year.

3.

The assessee’s next substantive ground seeks to delete Section 14A r.w. Rule 8D disallowance of Rs.31,302/- as made by both the lower authorities. Learned counsel is very fair in pointing out that the above co-ordinate bench has upheld similar disallowance(s) in preceding assessment years. He does not draw any distinction in the impugned assessment year. We therefore decline assessee’s latter substantive ground as well as main appeal ITA No.674/Ahd/2014.

4.

This leaves us with Revenue’s cross appeal ITA No.1080/Ahd/2014 raising solitary substantive ground that the CIT(A) has erred in reversing Assessing Officer’s action disallowing an amount of Rs.716.99 lacs on account of co-

ITA Nos. 674 & 1080/Ahd/14 [Gujarat Co.Op. Milk Marketing Federation Ltd.] A.Y. 2010-11 - 3 -

operative development expenses including breed improvement expenditure. Its case is that the above expenses are not incurred in ordinary course as well as wholly and exclusively for the purpose of assessee’s business. The Revenue further seeks to treat the impugned expenditure to be of enduring nature. Learned representatives inform us that the above co-ordinate bench decision has already adjudicated the instant issue in assessee’s favour in affirming CIT(A)’s identical findings in said earlier assessment years. We therefore adopt consistency herein as well to reject Revenue’s instant substantive ground as well as main appeal ITA No. 1080/Ahd/2014.

5.

These two cross appeals are accordingly dismissed.

[Pronounced in the open Court on this the 12th day of October, 2017.]

Sd/- Sd/- (PRAMOD KUMAR) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 12/10/2017

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