ACIT Vs Gujarat Co-operative Milk Marketing Federation Ltd. (ITAT Ahmedabad)
Breed Development Spend Is Revenue, Not Capital: ITAT Ahmedabad Dismisses Revenue Appeals in Amul Case
ITAT Ahmedabad “D” Bench, in ACIT vs Gujarat Co-operative Milk Marketing Federation Ltd. (AMUL) (ITA Nos. 1455 to 1459/Ahd/2025 for AYs 2016-17, 2018-19, 2020-21, 2021-22 & 2022-23, order dated 23-12-2025), dismissed all Revenue appeals, holding that co-operative & breed development expenditure is revenue in nature.
The assessee incurred substantial expenditure towards co-operative structure strengthening, farmer education & training, fertility improvement programmes, and enhancement of milk productivity. Revenue treated such expenditure as capital, alleging enduring benefit and lack of direct nexus with business.
Upholding the orders of CIT(A), the Tribunal noted that the issue is squarely covered by multiple decisions of the Hon’ble Gujarat High Court in the assessee’s own case (AYs 2008-09, 2009-10, 2011-12, 2012-13) and by consistent Tribunal rulings up to AY 2014-15, all holding such expenditure to be incurred wholly & exclusively for business purposes.
ITAT observed that the programmes aimed at fertility improvement and productivity enhancement directly strengthen the milk supply chain, improve quality, ensure uninterrupted supply, and thus are integral to day-to-day business operations, notwithstanding any incidental long-term benefit.
Revenue fairly conceded that the matter is fully covered against it. Consequently, ITAT affirmed the allowability of the expenditure as revenue and dismissed all departmental appeals.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
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 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.
