Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 642 - AT - Income TaxTDS liability u/s. 194C - payment to members of AOP - Work received by the AOP executed by its members - relationship of principle to principle OR principle to agent - disallowance u/s. 40(a)(ia) - HELD THAT:- As decided in Shraddha & Mahalaxmi Joint Venture [2014 (12) TMI 347 - ITAT PUNE] assessee therein also an AOP had received contracts which in turn was executed by the two members of the AOP. A contention was raised that the said assessee AOP was established for obtaining work and receiving payments against the work done by the members of AOP. The said payment was to be distributed in the agreed ratio between the two members of the AOP for carrying out the work. The Co-ordinate Bench held no deduction of TDS is warranted on the payments between the assessee and its members and deleted the addition made by the AO for violation u/s. 40(A)(ia) of the Act by placing reliance in the case of M/s. Swapnali RDS Joint Venture [2014 (12) TMI 320 - ITAT PUNE]. CIT(A) correctly held that on verification of agreement between the members and held that the assessee was formed only to procure work contract and members therein executed the work in accordance with the memorandum of understanding as per their own risk, held the said relationship is of principle to principle but not as a principle to agent, or of employer – employee, or of contractor – sub-contractor. The CIT(A) by arriving such conclusion held deduction of TDS on the payments made by the assessee to its members does not arise. Decided against revenue.
|