TaxTMI 
TaxTMI 
TaxTMI 
2000 (9) TMI 1045
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.... is that VOACZ and H.C.C. would associate themselves in an unincorporated joint venture in the form of consortium, the sole object of which was to fulfil the obligations of the contract. Art. 23 defines the relationship of the parties as "The relationship of the parties shall be that of an unincorporated association formed for the purposes of collaborating in respect of the Contract. Each of the parties expressly agrees that it is not their intention through the joint venture to carry on business in common with the other parties with a view to profit and that it is their intention to utilise the joint venture safely for the better co-operation of their relationships with the employer and the division of the works and gross income arising under the contract. Each party shall bear its own losses and retain all profits arising from the performance of its requisite work's package. Nothing in this agreement shall be deemed to give rise to a partnership between the parties or to any contract for services between the parties and each of the parties undertakes to use all reasonable endeavours not to do any act or thing which would cause such a relationship to arise. "Thus, the joint ve....
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.... (vii) dreding and disposal offshore of loose sand and soft to medium stiff clay material to a depth of 15m CD beneath part of the area in which a Coal Wharf is to be constructed by others; (viii) construction of slope protection on filled and dredged slopes to depths of 15m CD within the Port basin using rock supplied by Madras Port Trust to a rock stockpile area within the Port site; (ix) provision and maintenance of site officers for the Engineer." 5. The applicant opened a temporary project office in India to execute their part of work and obtained permission from Reserve Bank of India, Chennai, to open a project office. The applicant has deployed from abroad dredgers, survey equipments, boats, computers, technical people and other relevant plant and machinery required for the execution of the contract. The applicant has made his own arrangement for the execution of work independent from that of HCC. There is no control and connection between the work done by the applicant and HHC. Each party will have to bear its losses and retain its profits. 6. The case of the applicant is that no AOP came into existence by the joint venture. Therefore in view of these facts, income of ....
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....isions of s. 44AB would be applicable in the case of the applicant and a sum equal to ten per cent of the contract amount as and when paid shall be deemed to be the profits and gains chargeable under the head "Profits and gains of business or profession" ? (9) Without prejudice to the above, whether on the facts and in the circumstances the amount of taxable profit could be determined by AAR at a fixed percentage of the gross receipts based on applicant's past profitability statements and other relevant factors, either assessable in the year of completion of the contract or year-wise ? 7. So far as question 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 a common purpose or common action and the o....
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....n De Nul, In re (ARR No. 427 of 1998) : 1999 236 ITR 489 (AAR). Dredgers, boats, equipment, computers and other plant and machinery deployed by the applicant for the first time in India and on which no depreciation has been "actually allowed" under the IT Act, 1961, will prima facie be entitled to depreciation allowance. However, it is not necessary to answer this question and the other questions raised separately and independently. The crucial question raised is question No. 8. On similar facts, the case of N.V. Jan De Nul (supra) was examined by this authority at length. This Authority took the view that assessment should be done in a case like this taking resort to the principle underlying s. 44BB which provides : "44BBB. Notwithstanding anything to the contrary contained in ss. 28 to 4 4AA, in the case of an assessee, being a foreign company, engaged in the business of civil construction or the business of erection of plant or machinery or testing or commissioning thereof, in connection with a turnkey power project approved by the Central Government in this behalf and financed under any international aid programme, a sum equal to ten per cent of the amount paid or payable (whe....