TaxTMI 
TaxTMI 
2017 (12) TMI 136
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....d by partnership firm under the deed of partnership then such income has to be assessed in the hands of firm. 3. That the finding that "it is a case of sub-contract and whenever there is a sub-contract, the contractor giving the contracts has to once again deduct tax which has not been done by the partner of the firm Sh. Dayanand, when the contract in question have been transferred to the firm and as such the only course of action as per the law is to file the return of income of Sh. Dayanand and claimed the refund" is factually incorrect, legally misconceived and untenable." 3. Apart the above additional grounds, the assessee has raised following grounds of appeal: "1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the denial of credit of TDS of Rs. 13,01,041/- on the income declared and assessed in the hands of the appellant firm on the basis that TDS has not been deducted in the name of appellant but in the individual capacity of the partner of the appellant. 1.1 That the reasoning the given by the learned Commissioner of Income Tax (Appeals) that 'if any refund is to be claimed by the appellant....
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.... 6. I have considered the rival arguments made by both the sides, perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. Ground 1 & 1.2 challenge the denial of credit of TDS of Rs. 13,01,041/- on the income declared and assessed in the hands of the appellant firm on the basis that TDS has not been deducted in the name of the appellant but in the individual capacity of the partner of the appellant. Also, additional grounds have been raised to include the income declared from contract works in the return of income furnished by the appellant for the instant assessment year. At the outset contract has been assigned to the assessee firm by the partner, which fact is also accepted by the leaned CIT (A) in his order at page 8, wherein he held as under: "ii) Whenever a contract is given to another party, by the party which has obtained the contract (sub-contract), provisions of TDS kick in once again. That is to say that whenever there is a sub-contract, the contractor giving the contracts has to once again deduct tax. Apparently this has not been done by the partner of the firm Sh. Dayanand, when the contract in question have been tr....
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....mained whether the firm be assessed as registered firm or unregistered firm. It was not in dispute that the assessee made all the necessary compliance required for getting the registration as per section 185. In K.D. Kamath & CO. v. CIT [1971] 82 ITR 680 the Supreme Court held that the fact that the exclusive power and control, by agreement of the parties, is vested in one partner, and the further circumstances that only one partner can operate the bank accounts or borrow on behalf of the firm, is not destructive of the theory of partnership provided two essential conditions are satisfied, namely (i) that there should be an agreement to share profits and losses of the business of the firm, and (ii) that the business must be carried on by all the partners or any of them acting for all. The above decision was squarely applicable in the case of the assessee as in the instant case also there was an agreement to share the profit and loss of the business of the firm. The business was carried on by all the partners, though the contract work was in the name of one of the partners. Therefore, the Dy. Commissioner (Appeals) was fully justified in allowing registration to the assessee-firm" ....
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....HP) CIT vs. Sirmour Truck Operators Union ix) 240 CTR 325 (P&H) CIT vs. Grewal Brothers x) 248 ITR 339 (AAR) Van Oord ACZ BV xi) 124 ITR 192 (Bom) CIT vs. British Drug Houses (India)P. Ltd xii) ITA No(s) 1280/PN/2006 (A.Y. 2003-04), 60/PN/2009 (A.Y. 2005-06), 177 and 178/PN/2008 (A.Y. 2002-03 and 2004-05 ITO vs. Rajdeep & PMCC Infrastructure, xiii) ITA No. 65/PN/2011 (AY 2007-08) M/s Gammon Progressive-JV 55 DTR 417 (Cal) Panna Lai Kejrilal vs. CIT xiv) 314 ITR 343 (AAR) Hyosung Corporation xv) 210 Taxman 49 (Mad)(Mag) Chennai Port Trust v. ITO 12. Once income is required to be assessed, TDS credit has to be allowed irrespective of the fact that the TDS is deducted in the name of the another person. i) 357 ITR 396 (AP) CIT vs. Bhooratnam (pages 98-103 of Paper Book) ii) ITA no. 2417/Kol/2013 Mr. Parmanand Tiwari vs. ITO (pages 104-108 of Paper Book) iii) ITA No. 99/Hyd/2010 ITO vs. M/s Limak Devi Singh (pages 109-144 of Paper Book) 13. Any income could not be treated to be taxable just because tax at source has been deducted on it. i) 73 taxmann.com 166 (Mum) ABB Switzerland Ltd. Vs. ....