AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (7) TMI 1165
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder or tenders known to the party of the joint venture can vary or seek to vary the same without previous written consent of the other. 3. Any bond, guarantees or indemnities required by or arising out of the terms and conditions of the tender or contract shall be procured by the parties of the second party namely M/s Ambika Enterprises. 4. Each member of the joint venture agrees in place at the disposal of the joint venture, at the beneficial of all its experience, technical knowledge and skill and shall in respect bare its share of responsibility and burden of completing the contract. The parties shall be responsible for physical and financial distribution of work i.e., M/s SMC Infrastructure Pvt Ltd., undertaken the responsibility of 51% of the entire work, M/s Ambika Enterprises 49% to the proportionate works. Both the partners i.e., M/s SMC Infrastructure Pvt Ltd., and M/s Ambika Enterprises filed tenders in the name of AOP and completed the work according to tenders and received payments. During the course of the assessment proceedings the Assessing Officer had observed that on going through the profit and loss account it is seen that the AOP had credited the contract rece....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en a contract work from Thane Municipal Corporation and sub-contracted the work to the JV partners. As per section 194C, the person making any payment to the specified persons including AOP after 1st April, 2008 is required to deduct the TDS whereas the case of the assessee is that the contract work taken from TMC has been sub-contracted to members of AOP and therefore the case of the assessee was squarely covered by sub-section 2 of sec. 194C and the assessee failed to deduct the tax on sub-contract payment to the members at 1% and committed default within the meaning of 40(a)(ia) and therefore, rejected the ground of appeal raised by the assessee. On being aggrieved assessee carried matter in appeal before the Tribunal. 7. The learned counsel for the assessee has submitted that the assessee AOP was only collective name for its members and the contract entered into by the AOP was only for the benefit of its members. There was no contract whatsoever between the AOP and its JV partners. It is further submitted that the members of the AOP i.e., M/s SMC Infrastructure Pvt Ltd and M/s Ambika Enterprises joined together as a AOP for the purpose of procuring the contract. The assessee A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cture Pvt Ltd. and M/s Ambika Enterprises and the only duty was entrusted to the AOP was filing of tender and after getting the contract the AOP partners executed the contract, accordingly, the amount received was shared by them. Therefore, in our humble opinion, there is no contract or sub-contract relationship existed in between the assessee and its JV partners namely M/s SMC Infrastructure Creations and Ambika Enterprises, therefore, section 194C(2) has no application in the facts of the assessee's case. 10. In so far as case laws relied on by the learned counsel for the assessee is concerned in the case of ESS KAY Construction Co. (supra) the Hon'ble Punjab and Haryana High Court's catch note is extracted as under: "The assessee was a firm and had entered into a contract with MES construction of certain buildings. It allotted wholly/partly the construction work to three concerns, which were stated to have completed construction and received payments in lieu thereof. The assessee being the contractor received the contract amount from MES, from which the tax was deducted by the former. The assessee did not deduct any tax from the payments made to the three concerns....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade to a resident. To understand the nature of the contract, it would be relevant to mention that in the present cases the assessee societies were created by [ the transporters themselves. The transporters formed the societies or unions with a view to enter into a contract with the companies. The companies enter into contract for transportation of goods and material fifth the society. However, the society is nothing more than a conglomeration of the truck operators themselves. The assessee societies have been created only with a view to make it easy to enter into a contract with the companies as also to ensure that the work to the individual truck operators is given strictly in turn so that every truck operator has an equal opportunity to carry the goods and earn income, the society itself does not do the work of transportation. The members of the society are virtually the owners of the society. It may be true that they both have separate juristic entities but that fact remains that the reason for creation of the society was only to ensure that work of provided to all the truck operators on equitable basis. A finding of the fact; has been rendered by the authorities that the soci....