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2012 (8) TMI 88 - AAR - Income TaxFormation of Association of persons (AOP) - held that:- The fact that the two consortium members entered into an memorandum of understanding first and then into an agreement between them separating their area of operations, cannot alter the picture. Nor can the fact that payments were agreed to be made to them separately for the work they had divided between them affect the status they acquired when they came together to bid for the work and their bid was accepted in terms of the tender for the whole work. - The internal division of responsibility by the consortium members and the recognition thereof by "X" or the making of separate payments by "X" to the two members, cannot dislodge the legal position of formation of an association of persons by the applicant and 'E'. - Formation of AOP is there. In the face of an indivisible contract and the existence of an association of persons, the claim that the amount payable in respect of design and engineering cannot be taxed in India, cannot be accepted. They are liable to be taxed in India.
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