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TMI Blog2016 (3) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... g. 2) The learned Commissioner of Income-tax (Appeals) erred in not appreciating that the assessee Joint Venture was in full control of the contract, responsible for its completion, submitting bills, receiving payments and making those payments to its members towards sub contract on which tax was deductible u/s.194C. 3) The learned Commissioner of Income-tax (Appeals) erred in not considering that if the share of profit is determined in the Joint Venture Agreement, then it cannot be anying but AOP and where the charge is on the income of the AOP, in such status, the Assessing Officer has no choice but to tax it irrespective of the fact as to whether such share of profit has been offered to tax or taxed in the hands of members or not. Reliance is placed on decision of Hon. Supreme Court in the case of Ch. Achaiah (1996) 218 ITR 239 and on the ruling of AAR in the case of Geo consultant ST GMBH in 304 ITR 283. 4) The appellant craves leave to add, alter or amend any or all the grounds of appeal. 3. Shri Nikhil Pathak appearing on behalf of the assessee submitted at the outset that the issue raised in the appeal is identical to the issue adjudicated by the Co-ordinate Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, in ITA.No.65/PN/2011 for A.Y. 2006-07 dated 22nd August 2012 in the case of ITO Vs. Gammon Progressive-JV, wherein vide paras 5 to 9 the Tribunal decided similar issue in favour of the assessee by dismissing the appeal of the Revenue, by observing as under: "5. After going through the above submissions and material on record, we find that the first issue is regarding status of the assessee. The Assessing Officer has mentioned the status as firm. However, in the explanation given, the assessee has made it clear that the status in which the returns was filed was that of an AOP. It was explained that in the returns of income since beginning till the A.Y. 2006- 07, the status was mentioned as AOP only, i.e., when the returns were filed manually. However, from A.Y. 2007-08, when electronic filing had to be done, due to computer error the status appeared as 'firm' on the ITR acknowledgement, whereas in the computation of total income, it was correctly mentioned as AOP. It was explained that I.T.Return Form No.5 was actually applicable for firms, AOPs and BOIs. Therefore, this error might have occurred. The assessee has also filed computation of total income alongwith acknowledgeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the difference between revenue sharing arrangement entered into by the joint venture vis-a-vis sub-contract. It was explained on behalf of the assessee that in the case of sub-contract, there was a relationship of principal and agent whereas in the situation of revenue sharing, it was on a principal to principal basis. Further, in subcontracting, the contractor retains his share of profit alongwith the TDS and only the balance is passed on to sub-contractor. But in joint venture, assessees did not retain any share in the revenue with it and has passed the entire gross revenue alongwith TDS apportioned for them. It was submitted that the Department has also issued tax apportionment certificates every year during the past eight years to enable the two members to claim the TDS credits in their respective cases. Even in the current assessment year, it was noticed that tax apportionment certificate was issued by the Department vide letter No.Pn/Wd.3(4)/TC/07-08 dated 26.11.2008 of the Assessing Officer in which the Assessing Officer has allowed apportionment of entire TDS of Rs. 9,26,588/- during the year to M/s.Gammon India Ltd., since entire work during the year was carried out by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by them. Therefore, it was stated that there was no loss to the revenue as a result of this method adopted by the assessee of sharing the gross revenue by its members, which was taxed in their hands. However, this explanation of the assessee did not find favour from the Assessing Officer. The assessee has also raised the issue of consistency stating that the same method was being accepted by the Department in the past 8 to 10 years including A.Y. 2007- 08 in which tax apportionment certificate was also being issued. It was contended that this aspect has not been considered in the assessment order u/s.143(3) for A.Y. 2007-08. On the principle of consistency, the Ld. Authorised Representative relied on the decision of Hon'ble Bombay High Court in the case of Gopal Purohit (2010) 228 CTR 582 (Bom.) and assessee also relied on the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang vs. CIT (1992) 193 ITR 321 (SC) wherein it was observed that strictly speaking the principle of res judicata does not apply to income tax proceedings since each assessment year was a separate unit in itself and what is decided in one year may not apply in the following year. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AOP unless the AOP receives monies in its own right. We have noted that Hon'ble Authority of Advance Rulings was in seisin of a materially identical situation in the case of Van Oord ACZ BV In Re(248 ITR 399) in which two contractors joined hands for carrying out neatly identified separate work which was a part of composite contract awarded to the AOP, but the taxability of income from such contract was held to be taxable in the hands of the respective contractors. While holding so Hon'ble Authority for Advance Ruling observed as follows: "7. So far as question Nos. 1 and 2 are concerned the parties have specifically ruled out constitution of any partnership between them. There is no sharing of profits or loss. They have specifically provided in the agreement that each party will bear its own loss and retain its profits as and when such profits or loss arise. Having regard to the agreement we are of the view that the applicant cannot be treated as a partnership which can only be created by an agreement. Nor can it be treated as an AOP. In order to constitute an AOP there will have to be common purpose or common action and the object of the association must be to produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above discussion, we are not inclined to interfere in the finding of the CIT(A) who has directed the Assessing Officer to delete the addition. The same is upheld. 9. In the result, the appeals filed by the Revenue is dismissed." 4. Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so following same reasoning we are not inclined to interfere with the finding of the CIT(A) who has rightly held that there is no question of disallowance made u/s. 40(a)(ia) of the Act in all these cases. Same is upheld." Even before us nothing contrary was brought to our knowledge. Facts being similar, so following the same reasoning, we are not inclined to interfere with the findings of CIT(A), who has rightly held that there is no question of disallowance made under sec. 40(a)(ia) of IT Act in this case. The same is upheld. 3. In the result, appeal filed by revenue is dismissed." 7. The ld. DR has not been able to controvert the findings of the Coordinate Bench of the Tribunal on the issue raised. Respectfully following the decision of Co-ordinate Bench, we dismiss the appeal of the Revenue being devoid of any merit. 8. In the result, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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