Dudhsagar Research and Dement Association Vs DCIT (ITAT Ahmedabad)
The present appeals were filed by Dudhsagar Research and Dement Association before the ITAT Ahmedabad against the orders passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi, dated 27 November 2024, for the assessment years 2016-17 and 2017-18. The appeals challenged the denial of exemption under Sections 11 and 12 of the Income Tax Act, 1961, and the treatment of certain corpus donations as taxable revenue.
The assessee’s grounds of appeal contended that the CIT(A) erred in holding that the trust’s activities, specifically the sale of frozen semen doses, fell under the residual limb of “advancement of any other object of general public utility” and hence were trade or commerce activities. The assessee argued that the exemption under Sections 11 and 12 should have been allowed and that Section 13(8) was incorrectly invoked. It also disputed the classification of corpus donations from milk-supplying societies as revenue receipts, asserting they were voluntary contributions intended to fund capital projects such as Dairy Science and Food Technology College. The assessee sought deletion of all additions made by the authorities.
The facts reveal that the assessee filed returns declaring nil income for A.Y. 2016-17. During assessment, the officer examined the trust’s activities, including medical relief for animals, progeny testing, vaccination, artificial insemination, bull rearing, and education in dairy technology. The officer observed that the main revenue source was the sale of frozen semen doses, which constituted a commercial activity. Invoking the proviso to Section 2(15) and Section 13(8), the Assessing Officer denied exemptions under Sections 11 and 12. The corpus donations, amounting to over Rs. 7 crore, were linked to milk fat supplied by cooperative societies and were deemed compulsory rather than voluntary. Consequently, they were treated as revenue receipts under Section 2(24)(iia), leading to a total assessed income of Rs. 6.41 crore for A.Y. 2016-17. A similar approach was applied for A.Y. 2017-18.
