TaxTMI 
TaxTMI 
2014 (2) TMI 510
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....fective grounds in all these appeals. "2. Whether on the facts and in the circumstances of the case, the CIT(A) was correct in making a distinction between Joint Ventures formed for the purpose of obtaining a contract and other Joint Ventures ? 3. Whether the CIT(A) was correct in concluding that Joint Ventures formed for the purpose of obtaining a contract have no liability to deduct TDS, although the CIT(A) allows no such exemption ?" 2. Facts in all the appeals being identical, we deal with the facts involved in ITA.No.713/Hyd/2013 for the assessment year 2005- 2006. Briefly, the facts are that the assessee is a Joint Venture engaged in the business of executing civil contract work of construction of roads an....
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.... once the project or contract is awarded to the Joint Venture/Consortium, it is to be executed in a ratio agreed upon by the constituents of the Joint Venture. The assessee further submitted that the Joint Venture is entitled to execute the major agreed portion of the total work awarded to the Joint Venture and in a case of consortium it was agreed that the entire work is to be executed by the assessee itself. It was submitted that the Joint Venture was only a dejure contractor but in fact, the constituents were the defacto contractors in respect of the respective portion of the work. It was thus submitted that the provisions of section 194C are not applicable to the assessee. In support of such contention, the assessee relied upon the Orde....
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....thout retaining any amount towards profit, then there may not be any liability on the assessee to deduct tax at source. We find that some what similar issue relating to disallowance under section 40(a)(ia) for non-deduction of tax at source under section 194C on the payments made to constituents arose in case of the assessee in the assessment year 2006-2007. The ITAT, Hyderabad Bench while deciding the appeal of the assessee as well as the department in ITA.No.646/Hyd/2010 and 701/Hyd/2010 dated 27.11.2012 held as under : "8. The joint venture or the consortium was formed only to obtain the contract from the Government bodies. At the time of execution of the joint venture or the consortium, it has been made clear that work/pro....
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....he respective portions of work. In such a case the question of the AOP giving the constituents works contract would not arise. In our opinion, in cases where the AOP is formed only for the purpose of obtaining contracts and specific portions of the contract are to be completed by the individual constituents independently, then it cannot be case of the AOP giving works contract to the constituents. This view is supported by the decision of the ITAT Vishakhapatnam in the case of M/s Transstory (India) Ltd Guntur 2011-TIOL-499-ITAT-VIZAG. The AAR in the case of In re Mitsubushi Corpn 323 ITR 277 has held that under similar circumstances when an AOP was formed only for the purpose of getting orders and the members carried out specific portions ....
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.... specific constituents, the proof its from the portion of the projects derived from the individual constituent can be offered by them for tax in their return. Once such income is assessed in their individual hands the Assessing officer cannot again bring to tax the entirety of the receipts in the hands of the Consortium. Consequently there cannot be any disallowance in the hands of the consortium any amounts receivable by the constituents towards their share of work on the ground that consortium has not deducted tax at source from such payment. The credit for the TDS made by the client will be available to the respective constituents who has offered income on which such TDS has been made, even though the certificate issued by the client is ....