TaxTMI 
TaxTMI 
2025 (2) TMI 1593
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....enue's appeal) 2. The revenue has raised the following grounds : " 1. The CIT(A) erred in holding that the assessee is not under any obligation to deduct tax at source since there was no contractor and sub-contractor relationship between the assessee and its constituent members. 2. The CIT(A) ought to have seen that the contract was awarded in favour of the assessee, the assessee in turn got the work executed through its constituents. In the light of admitted facts, it cannot be said that there was no contractor and sub-contractor relationship between the assessee and its constituent. 3. The CIT(A) ought to have seen that the assessee JV was formed for the purpose of executing the contract works, whereas the finding of the Tribunal that there was no contractor and sub-contractor relationship between the assessee and its partners is based on no evidence. 4. Any other ground that may be urged at the time of hearing. " 3. The brief facts of the case are that the assessee is a Joint Venture ("JV") engaged in the business of executing civil contract works of construction of roads and other projects. The JV was formed by consortium of two constit....
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....e's own case. I am of the considered view that the issue is covered in favour of the assessee even for the impugned AY 2012-13. This is precisely because of the reason that whatever transactions disclosed in the FY 2011-12 relevant to the impugned AY are directly related to the same contract which was the subject matter of the appeal for the AY 2006-07 before the Hon'ble ITAT. As such, the decision of Hon'ble ITAT (supra) is applicable mutatis mutandis for the current AY also. Accordingly, by respectfully following the decision of Hon'ble ITAT, the grounds of appeal filed by the assessee are allowed. As the core issue is decided in favour of the assessee, I don't want to venture into adjudicating the other supplementary grounds raised by the assessee, including additional grounds of appeal, as the same would be a mere academic exercise. 4.1 Further, the Ld. CIT(A) also directed the Ld. AO to give credit for TDS deducted in the name of JV, to the constituents of JV, as per his observation at para no.7 of his order, which is to the following effect : 7.0 Direction to AO with regard to TDS Credit: 7.1 In this regard, it is important to note tha....
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....d that, the JV has paid the entire contract receipts received from the contractee to its constituents without retaining any portion of the profit. Hence, the payments made by the JV to its constituents cannot be treated as sub-contracts. To justify their submission, the Ld. AR brought our attention to para no.6 of the order of ITAT in assessee's own case for A.Ys. 2005-06 to 2007-08 and 2009-2010 in ITA Nos.713 to 716/Hyd/2013 dated 14.08.2013 and submitted that the JV was only a dejur contractor, in fact the constituents were the de facto contractor in respect of the respective portion of the works. Therefore, the provisions of section 194C of the Act is not applicable to the assessee. Hence, the Ld. AR prayed before the bench to uphold the order of Ld. CIT(A). 7. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. As per the submission of the Ld. AR, the JV has paid the entire contract receipts received from the contractee to its constituents without retaining any portion of the profit. Hence, it is the contention of the Ld. AR that the payment made by JV to its constituents is not in the nature of sub-c....
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....) will not be made applicable to the assessee. Accordingly, the appeal of the Revenue is allowed for statistical purposes." On perusal of above, it is found that, this Tribunal has given the findings that, the payments made by the JV to its constituents are not in the nature of sub-contract and is not covered under the provisions of section 194C of the Act. 8. Respectfully following the decision of this ITAT in assessee's own case for A.Ys. 2005-06 to 2007-08 and 2009-2010 in ITA Nos.713 to 716/Hyd/2013 dated 14.08.2013, we hold that, if the entire receipts received by the JV has been passed on to the constituents without retaining any portion of the profit out of the contract receipts, then the payments made by the JV to its constituents will not fall under the provisions of section 194C of the Act and no disallowance can be made u/s.40(a)(ia) of the Act in the hands of the assessee. However, whether the assessee had retained any profit out of the contract receipts or not is the subject matter of verification from the records of the assessee. Therefore, the Ld. AO is directed to verify the same and if after verification, the Ld. AO found that, the entire contract receipt....
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....ly in accordance with the decision of the Hon'ble ITAT (supra) wherein it is clearly stated that credit for TDS will be available to the constituents of the JV though the TDS certificates have been issued by the contractee in the name of the JV. 13. The Ld. AR also submitted that, the Ld. CIT(A) has erred in making direction to the Ld. AO to give credit of the TDS on the contract receipts to the constituents. However, actually the assessee is eligible for credit of the TDS. Therefore, the Ld. AR prayed before the bench to set aside the order of Ld. CIT(A). 14. The Ld. DR relied on the order of Ld.CIT(A). 15. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. On identical issue, we found that this ITAT in assessee's own case in ITA Nos.646 & 701/Hyd/2010 dated 27.11.2017 for A.Y. 2006-07, at para no.9 of its order has given the finding that, the credit for the TDS made by the deductor will be available to the respective constituents who has offered income on which such TDS has been made, even though the certificate is issued by the deductor in the name of the Consortium, which is to the following....