https://www.taxtmi.com/caselaws?id=755346 ITAT Kolkata held that assignment of contractual receipt by a JV to one of its partners for project execution cannot be construed as expenditure under section 40A(2)(b). The JV entered into an agreement to bid for highway development in Bihar and assigned the contract to one partner on cost-to-cost basis. The AO incorrectly treated project cost as expenditure and made disallowances. The tribunal ruled that project cost differs from expenditure - it represents funds for execution, not services availed. The assignment created no profit element requiring deemed treatment. Following precedent from earlier assessment year where CIT(Appeals) decided favorably and revenue accepted, the tribunal allowed all appeals and deleted disallowances. en-us Wed, 13 Dec 2023 00:00:00 +0530 Thu, 11 Jul 2024 08:36:52 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=755346 ITAT Kolkata held that assignment of contractual receipt by a JV to one of its partners for project execution cannot be construed as expenditure under section 40A(2)(b). The JV entered into an agreement to bid for highway development in Bihar and assigned the contract to one partner on cost-to-cost basis. The AO incorrectly treated project cost as expenditure and made disallowances. The tribunal ruled that project cost differs from expenditure - it represents funds for execution, not services availed. The assignment created no profit element requiring deemed treatment. Following precedent from earlier assessment year where CIT(Appeals) decided favorably and revenue accepted, the tribunal allowed all appeals and deleted disallowances. Case-Laws Income Tax Wed, 13 Dec 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=755346