Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Short Notes

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2017 (9) TMI 1830

e and whether such a consortium formed for the purposes of obtaining the contract constitutes an AOP or not ? - case of the AO that consortium/joint-venture in the instant case constitutes an AOP and thus a separate entity for incidence of taxation - assessee claims that the joint-venture agreement has been merely entered for the purposes of bidding for the project for which the tender was invited by the principal i.e. Bhopal Municipal Corporation - HELD THAT:- Various clauses of the SA (supplementary agreement) are suggestive of the fact that it is the constituent-JMC indeed who is solely responsible for execution of the entire project. It is the JMC who is under obligation to bring in all resources, finances and all other services require .....

X X X X X X X

Full Text of the Document

X X X X X X X

IT(A). 10. However, in the same vain, a liberty is granted to AO to call for necessary records from the Assessee-AOP herein to satisfy itself that the contract receipts in question and income thereon has suffered taxation in the hands of its constituent namely JMC Projects (India) Ltd., if so considered expedient, to ensure that contract receipts have been assessed in the hands of its member. Once, it is found that contract receipts have been assessed in the hands of constituent, the assessment of same receipts in the hands of AOP will cease to exist - Decided against revenue - I.T.A. No.2503/Ahd/2012 (Assessment Year : 2009-10) - 6-9-2017 - Shri Pradip Kumar Kedia, Accountant Member & Shri Mahavir Prasad, Judicial Member Appellant by: .....

X X X X X X X

Full Text of the Document

X X X X X X X

entity as an AOP. Thus, profit arising on aforesaid gross business receipts of ₹ 5,93,77,921/- during the year in respect of work contracts allotted to it is susceptible to tax in the hands of assessee s joint-venture. The AO observed that assessee-AOP being taxable entity in the eyes of law was liable to tax on income from the contract receipts in the status of AOP on the premise that contract was entered by the joint-venture. It was noted by the AO that the joint venture has received the consideration and then wrongly parted with the same in favour of its constituents. The AO thus held that assessment of the income arising from aforesaid contract receipts ought to have been done in the hands of the AOP who is the right person for ta .....

X X X X X X X

Full Text of the Document

X X X X X X X

execution of the work. The other joint venture Member PPPL is not to be called upon to provide such resources, services etc. The Ld.AR next submitted that the joint venture agreement was solely executed for the purpose of obtaining the work contract and does not represent any AOP or partnership between its constituents viz. JMC and PPPL. This agreement is only a work sharing arrangement to meet contractual agreement with its client. It is the supplementary agreement which defines the inter se relationship of constituents. It was submitted that as per the supplementary agreement between the joint venture members, JMC has indemnified the other member (PPPL) for any and all contractual obligations arising execution for the project. It was sub .....

X X X X X X X

Full Text of the Document

X X X X X X X

ve accrued in the hands of AOP when the contract has been awarded to a consortium/joint-venture and whether such a consortium formed for the purposes of obtaining the contract constitutes an AOP or not. It is the case of the AO that consortium/joint-venture in the instant case constitutes an AOP and thus a separate entity for incidence of taxation. The assessee, on the other hand, claims that the joint-venture agreement has been merely entered for the purposes of bidding for the project for which the tender was invited by the principal i.e. Bhopal Municipal Corporation. It is the case of the assessee that by virtue of supplementary agreement dated 08/02/2008 between JMC and PPPL (other jointventure member) their correct relationship has bee .....

X X X X X X X

Full Text of the Document

X X X X X X X

statutory requirements without any overlapping of responsibility. Under these circumstances, we find that it is one of the members, namely, JMC Project (India) Ltd. which essentially bears the risk of scope of work and enjoys control over the project. This being so, in view of the recent CBDT Circular No.7/2016 dated 07/03/2016, the assessee herein has rightly not been treated as an AOP for taxation purposes. We find that the CIT(A) has rightly held that income from the contract awarded by the principal cannot be said to have been accrued in the hands of the appellant AOP notwithstanding JV document executed for bidding and thus the appellant herein is not liable for income estimated on the contract awarded. We find no infirmity in the conc .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||