TMI Blog2019 (12) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the joint venture as agreed between them. Accordingly, the fees from the execution of the project work were shared between the members as per their understanding - HELD THAT:- Both, the Commissioner (Appeals) as well as the Tribunal, have found that the members of the joint venture have duly shown the income in their returns of income and have paid the tax thereon. The joint venture and the members of the joint venture are being taxed at the maximum marginal rate, and hence, no loss has been caused to the revenue. Moreover, the Tribunal as a matter of fact has found that the requirements of CBDT circular referred to hereinabove are duly satisfied in the case of the assessee and hence, once the amount has been offered to tax by its mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove referred order of the Tribunal by proposing the following three questions, stated to be substantial questions of law:- (A) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of ₹ 8,72,76,300/- made by the Assessing Officer by adopting net profit ratio @ 11.59% of the gross receipts? (B) Whether the Appellate Tribunal is right in law and on facts in holding that the assessee, despite being an AOP, was correct to distribute business receipts directly among its constituents members without recording the same in its profit and loss account? (C) Whether the business receipt distributed by the assessee amongst its members is application of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , instead of distributing the net profit, the assessee had directly distributed the business receipts amongst its constituent members in the so-called participation ratio. The Assessing Officer was of the view that an association of persons is a person and in terms of section 4 of the Act, income tax shall be charged on the total income of every person and the expression includes inter alia, a firm and an association of persons or a body of individuals. He, accordingly, finalised the assessment under section 143(3) of the Act treating the assessee as an association of persons and making addition of ₹ 8,72,76,300/- for assessment year 2009- 10 by adopting the net profit ratio at 11.59% of the gross receipt and made an addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is formed for earning profit or otherwise, to file a return of income. He, however, found that the assessee had complied with all such requirements and was of the opinion that it is not necessary that in all facts and circumstances, such association of persons should show positive income. The Commissioner (Appeals) further found that the assessee duly maintains books of accounts, gets its books audited and files return of income to discharge its statutory liability. It has also complied with the other provisions of deduction of TDS from subcontract transaction and paid the tax to the exchequer and that the Assessing Officer to this extent could not draw any adverse finding. The Commissioner (Appeals) was further of the view that in the abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in a transparent manner subject to audit and scrutiny. 11. The Tribunal, in the impugned order, has concurred with the findings recorded by the Commissioner (Appeals) and has found that the association of persons was formed only to secure the work and after that there was no involvement of such association of persons in the execution of the work as the entire work was executed by the members of the joint venture as agreed between them. Accordingly, the fees from the execution of the project work were shared between the members as per their understanding. The Tribunal further noted that the members of the joint venture have disclosed the entire income which was originally received by the assessee in their books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enture are being taxed at the maximum marginal rate, and hence, no loss has been caused to the revenue. Moreover, the Tribunal as a matter of fact has found that the requirements of CBDT circular referred to hereinabove are duly satisfied in the case of the assessee and hence, once the amount has been offered to tax by its members, the assessee could not be saddled with the liability to pay tax in respect of the same amount. 13. Having regard to the concurrent findings recorded by the Tribunal after appreciating the material on record as referred to hereinabove, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to warrant interference. No question of law, much l ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
