TaxTMI 
TaxTMI 
2014 (12) TMI 347
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....made under section 40(a)(ia) without appreciating the fact that the work contract order issued to the ass were in assessee's name and so also the payments were credited to the assessee's account and as such reallocation of these contracts among the members of the assessee would amount to sub contracting. 2. The CIT(A) erred in not appreciating that the assessee joint venture was in full control of the contract, responsible for its completion, submitting bills, receiving payments and making those payments to its members towards sub contract on which tax was deductible under section 194C. 3. The CIT(A) erred in not considering that if the share of profit is determined in the joint venture agreement, then it cannot be anything but AOP and where the charge is on the income of the AOP, in such status, the Assessing Officer has no choice but to tax it irrespective of the fact as to whether such share of profit has been offered to tax or taxed in the hands of members or not. Reliance is placed on decision of Hon'ble Supreme Court in the case of Ch. Achaiah (1996) 218 ITR 239 and on the ruling of AAR in the case of Geoconsultant ST GmbH in 304 ITR 283." 4. Facts in brief are that the as....
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...., which was upheld by the Tribunal, Pune Benches, in ITA no.771/PN/3022, vide order dated 26th September 2012, deleted the disallowance made by the Assessing Officer under section 40(a)(ia) of the Act. Aggrieved by the order so passed by the CIT(A), the Revenue is in appeal before us. 7. Before us, the Departmental Representative, fairly admitted that the facts in the present case were identical to the facts in ITO v/s Swapnali RDS Joint Venture, ITA no.771/PN./2011, order dated 26th September 2012, endorsed by the Assessing Officer in the office note attached to the assessment order passed in the case. 8. The A.R. for the assessee, in support of his claim, relied upon the following case laws:- i) ITO v/s Swapnali RDS Joint Venture, ITA no.771/Pn./2011, order dated 26th September 2012; ii) Shraddha & S.S. Kale J.V., CIT(A)'s order dtd 31.8.2012; iii) VAN Oord ACZ, BV In re. [2001] 248 ITR 399 (Del.); and iv) Hyndai Rotem Co. in re. [2010] 323 ITR 277 (AAR). 9. He, however, submitted that the issue involved in all these appeal is squarely covered by the decision of the predecessor-in-office of the CIT(A) in Swapnali RDS Joint Venture cited supra which was subsequently upheld b....
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.... was that of an AOP. It was explained that in the returns of income since beginning till the A.Y. 2006- 07, the status was mentioned as AOP only, i.e., when the returns were filed manually. However, from A.Y. 2007-08, when electronic filing had to be done, due to computer error the status appeared as 'firm' on the ITR acknowledgement, whereas in the computation of total income, it was correctly mentioned as AOP. It was explained that I.T.Return Form No.5 was actually applicable for firms, AOPs and BOIs. Therefore, this error might have occurred. The assessee has also filed computation of total income alongwith acknowledgements from A.Y. 2002-03 to A.Y. 2006-07 in which the status was regularly shown as AOP and even in the application form for allotment of PAN it was shown as AOP. The CIT(A) noticed from the record that status was shown as AOP. However, it was not very much relevant for the purpose of applicability of provisions of section 194C since TDS provisions are applicable to all entities except individuals and HUF having gross receipts or turnover from business or profession below the prescribed limit. 6. It was further explained on behalf of the assessee that joint venture....
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....gross revenue alongwith TDS apportioned for them. It was submitted that the Department has also issued tax apportionment certificates every year during the past eight years to enable the two members to claim the TDS credits in their respective cases. Even in the current assessment year, it was noticed that tax apportionment certificate was issued by the Department vide letter No.Pn/Wd.3(4)/TC/07-08 dated 26.11.2008 of the Assessing Officer in which the Assessing Officer has allowed apportionment of entire TDS of Rs. 9,26,588/- during the year to M/s.Gammon India Ltd., since entire work during the year was carried out by it. Similarly, there has been apportionment to either of the two companies or to both the companies in the earlier years also by the Assessing Officer for enabling them to claim TDS in respective cases. The assessee, vide its submission dated 22.04.2010, furnished the details which revealed that gross revenue from this contract receipts by joint venture was accounted for in case of either or both of the two companies who were members of the joint venture in all assessment years 2001-02 to 2008-09. It was further explained by the assessee that revenue sharing was not....
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....idered in the assessment order u/s.143(3) for A.Y. 2007-08. On the principle of consistency, the Ld. Authorised Representative relied on the decision of Hon'ble Bombay High Court in the case of Gopal Purohit (2010) 228 CTR 582 (Bom.) and assessee also relied on the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang vs. CIT (1992) 193 ITR 321 (SC) wherein it was observed that strictly speaking the principle of res judicata does not apply to income tax proceedings since each assessment year was a separate unit in itself and what is decided in one year may not apply in the following year. It was further contended that where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. It was also contended that Hon'ble Kerala High Court in the case of Manjunath Motor Service and Canara Public Conveyances, 197 ITR 321 (Kar.) observed that method adopted by the Assessing Officer would result in double taxation of the same inc....
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....Nos. 1 and 2 are concerned the parties have specifically ruled out constitution of any partnership between them. There is no sharing of profits or loss. They have specifically provided in the agreement that each party will bear its own loss and retain its profits as and when such profits or loss arise. Having regard to the agreement we are of the view that the applicant cannot be treated as a partnership which can only be created by an agreement. Nor can it be treated as an AOP. In order to constitute an AOP there will have to be common purpose or common action and the object of the association must be to produce income jointly. It is not enough that the persons receive the income jointly. In the instant case, each of the two parties has agreed to bear its own loss or retain its own profit separately. Both have agreed to execute the job together for better co-operation in their relationship with the Chennai Port Trust. The intention was not to carry out any business in common, only a part of the job will be done by VOACZ according to its technical skill and capability. The other part of the contract will be executed by HCC. The total value of the contract was Rs. 2,62,01,03,120. t....