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2016 (6) TMI 40 - ITAT DELHIAssessment as AOP - whether the consortium is to be taxed as an AOP or Individual members are to be taxed separately? - Held that:- We have examined the Joint venture agreement dated 17th December 2002. On reading of clause no .4 5,8,10,11,16 especially and on conjoint reading of other clauses of the agreement its is apparent that each of the members is responsible for its own part of the contract execution, will take away gross receipt and incurred expenditure for the execution of project relating to his part and earn profit or loss accordingly. The control and management of consortium rests with individual consortium members with respect to their work and for the coordination purposes one Lead party Persys SDN. BHD. Is nominated for coordination with DMRC. Therefore, it satisfies all the four conditions mentioned in para no 3 of the circular NO.7/2016. Ld. DR could not point out any clause of the agreement, which does not satisfy any of the above four conditions of the circular. Further by the circular stated above revenue has also reiterated salient features of what would constitute and AOP and held that if the above four conditions are satisfied than the consortium arrangement shall not be treated as an AOP but individual members will be taxed separately. Thus considering the terms and conditions between the parties are squarely falling within the conditions specified in para no 3 of the above circular. Therefore, we confirm the finding of the ld. CIT (A) that income arising from the DMRC contract was not assessable to tax in the hands of AOP but each member of the AOP shall be separately assessable to income tax in their own capacity.
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