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TMI Blog2018 (1) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... on 'Material & Operating Cost & Employee Cost' in the facts and circumstances of the case. 3. Brief facts of the case relating to the issue are that the assessee is a joint venture (JV) between M/s. BLA Pvt. Ltd of Kolkata and M/s. Dinesh Chandra Agarwal Infracon Pvt. Ltd of Gujarat having proportionate share of profit of 95% and 5% respectively. The assessee JV succeeded in bidding in respect of highway road construction for development of 95 kms in the State of Bihar under the scheme 'Rashtriya Sam Vikas Yojana'. 4. In the course of executing said contract the assessee entrusted sub-contracts to M/s. BLA Pvt. Ltd & M/s. BLA Infrastructure Pvt. Ltd. According to AO, the assessee JV received a receipt of Rs. 33,12,91,735/- and made payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Rs. 30,69, 38,537 from contract receipt of Rs. 33,12,91,735 received from CPWD, a further sum of Rs. 2,05,42,294 is reduced from the profit as business expenses to arrive at the year's business / profit of Rs. 38,10,903. The net profit of the year was thus merely 1.2% of the turnover. 5. To find out what sort of residual Work was executed by the JV which was not given on sub-contract, and to make a cost analysis of the total executed Work as claimed in the accounts of the assessee, the assessee was asked to provide the cost of Work attributable to the sub-contractors and to 'itself, in a specified tabular format. A "comparison statement" was furnished on 25/3/2013 in the specified format but without all the specified detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the JV has devised an arrangement with its own member and allied companies/firms to reduce the normal profit of a contractor's business through multilayered expenditures. Most expenses relatable to the alleged residual Work were made in cash and thus could not be related to stated recipients. In this assessment I am lifting the veil of impropriety of tax planning resorted to by the assessee by disallowing the expenses related to unidentifiable residual Work allegedly carried on by BLA Pvt Ltd in the status of a JV. Administrative & Other Expenses listed in Schedule 12 of the P&L account amounting to Rs. 1,51,03,590 is allowed-liberally for deduction u/s 36 and 37 for running of the administration of the JV. The sum of Rs. 54,38.704 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduced herein below:- "After going through the facts and circumstances of the case, I find that the appellant failed to give the details of work executed by the JV with supporting documents/details either before the AO or before me. I do not find any infirmity in the AO's order as the appellant failed to produce any evidence or the documents to substantiate their claim that there was any work which was not to be executed by the sub-contractors and which was executed by the appellant JV. It also could not be proved that the appellant had any machinery/tools to execute any designated work. In absence of supporting documents/details to substantiate their claim in this regard, the stand taken by the AO was justified. Further, the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us submitted a detailed paper book (2 sets) No. 1- containing pages 1 to 169 and No.2 pages 1 to 36 in support of the contention regarding various expenditure incurred by the assessee under various heads. The ld.AR also filed paper book containing four items i.e joint venture agreement, comparative chart, audited accounts & assessment order for A.Y 2009-10 dt. 27-12-2011. He also referred to page-1 of the 2nd paper book and the ld.AR also drew our attention to the page 10 of paper book and argued that the assessee being JV incurred expenditure under the main head at Sl.No.3 and submitted that the expenditure incurred under the Sub-heads - (b) to (i) was incurred wholly and exclusively for business purpose. The ld.AR pointed out Sl. No. 4 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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