2019 (12) TMI 212

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ce the facts and contentions in both these appeals are similar, the same were taken up for hearing together and are being decided by this common judgment. 2. The assessment years are 2009-10 and 2008-09 respectively. The appellant has challenged the above referred order of the Tribunal by proposing the following three questions, stated to be substantial questions of law:- "(A) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 8,72,76,300/- made by the Assessing Officer by adopting net profit ratio @ 11.59% of the gross receipts? (B) Whether the Appellate Tribunal is right in law and on facts in holding that the assessee, despite being an AOP, was correct to distribute business receipts direc....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....equired to prepare profit and loss account and distribute the profit, if any, amongst the members of the association of persons. However, instead of distributing the net profit, the assessee had directly distributed the business receipts amongst its constituent members in the so-called participation ratio. The Assessing Officer was of the view that an association of persons is a 'person' and in terms of section 4 of the Act, income tax shall be charged on the total income of 'every person' and the expression includes inter alia, a firm and an association of persons or a body of individuals. He, accordingly, finalised the assessment under section 143(3) of the Act treating the assessee as an association of persons and making addition of Rs. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... duty is cast upon an association of persons irrespective of the fact whether the same is formed for earning profit or otherwise, to file a return of income. He, however, found that the assessee had complied with all such requirements and was of the opinion that it is not necessary that in all facts and circumstances, such association of persons should show positive income. The Commissioner (Appeals) further found that the assessee duly maintains books of accounts, gets its books audited and files return of income to discharge its statutory liability. It has also complied with the other provisions of deduction of TDS from subcontract transaction and paid the tax to the exchequer and that the Assessing Officer to this extent could not draw a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....raud the revenue since all the transactions are disclosed and entered into in a transparent manner subject to audit and scrutiny. 11. The Tribunal, in the impugned order, has concurred with the findings recorded by the Commissioner (Appeals) and has found that the association of persons was formed only to secure the work and after that there was no involvement of such association of persons in the execution of the work as the entire work was executed by the members of the joint venture as agreed between them. Accordingly, the fees from the execution of the project work were shared between the members as per their understanding. The Tribunal further noted that the members of the joint venture have disclosed the entire income which was orig....