TMI Blog2017 (11) TMI 1873X X X X Extracts X X X X X X X X Extracts X X X X ..... s rightly held that there is no question of disallowance made u/s. 40(a)(ia) of the Act Decided against revenue. - ITA No.148/PUN/2016 - - - Dated:- 15-11-2017 - Shri Anil Chaturvedi, AM And Shri Vikas Awasthy, JM Assessee by : Shri Ulhas Kini Revenue by : Mrs. Nirupama Kotru. ORDER ANIL Chaturvedi, AM : 1. This appeal filed by the Revenue is emanating out of the order of Commissioner of Income Tax (A) 3, Pune dt.12.11.2015 for the assessment year 2012-13. 2. The relevant facts as culled out from the material on record are as under :- Assessee is a Joint Venture (JV) consisting of Subhash Projects Marketing Ltd., B.T. Patil Sons Belgaum Constructions Pvt. Ltd., and N.V. Kharote Construction Pvt. Ltd. It is stated that the JV was formed solely for the purpose of acquiring project work of construction of Jihe Kathapur Lift Irrigation Scheme and other projects. Assessee electronically filed its return of income for A.Y. 2012-13 on 25.09.2012 declaring nil taxable income. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dt.25.02.2016 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee carried the matter before Ld.CIT(A), who decided the issue in favour of the assessee by observing as under : 3.2 I have considered the submission made by the appellant and perused material on record. The issue raised in grounds no. 1 to 4 revolves around the single issue of giving credit of tax deducted at source to the joint venture instead of the members of joint venture i.e. (i) Subhash Projects Marketing Ltd. (ii) B.T. Patil Sons Belgaum Construction Pvt. Ltd. and (iii) N.V. Kharote Construction Pvt. Ltd., has been pointed out by the appellant, that the Hon ble ITAT Bench has passed orders in the case of Shraddha IHP Joint Venture vide ITA Nos. 942/943/PN/2013 on 28.11.2014 on similar issues. In this order the Hon'ble Bench analysed the issue in the context of its own decision in ITO Vs Swapnali RDS Joint Venture in ITA No. 771/PN/2011. In that case, the facts of which are identical, the hon'ble Bench has held that there was no relationship of contractor and contractee between the joint venture and its partners and since contract receipts, assets, liabilities were apportioned between the members, therefore, taxability of the income has to be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the relevant paras of the order of the Tribunal. He further submitted that CBDT vide Circular No.7/2016 [F.No.225/2/2016/ITA.II] dt.07.03.2016 has also clarified the issue. He therefore submitted that no interference to the order of Ld.CIT(A) is called for. 5. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to disallowance u/s 40(a)(ia) of the Act. We find that identical issue arose in assessee s own case for A.Y. 2010-11 and 2011-12. The Coordinate Bench of the Tribunal vide order dt.09.08.2017 has dismissed the appeals of Revenue by observing as under : 7. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to application of provisions of Sec.40(a)(ia) of the Act. We find that the Co-ordinate Bench of the Tribunal in the case of Shraddha Mahalaxmi Joint Venture (supra) on identical facts and after relying on the decision in the case of Swapnali RDS Joint Venture (supra) has decided the issue in favour of the assessee by holding as under: 10. We have heard the rival and perused the records. In the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 acknowledgements from A.Y. 2002-03 to A.Y. 2006-07 in which the status was regularly shown as AOP and even in the application form for allotment of PAN it was shown as AOP. The CIT(A) noticed from the record that status was shown as AOP. However, it was not very much relevant for the purpose of applicability of provisions of section 194C since TDS provisions are applicable to all entities except individuals and HUF having gross receipts or turnover from business or profession below the prescribed limit. 6. It was further explained on behalf of the assessee that joint venture as such does not execute any contract work but were merely formed for obtaining contract work and for receiving the payment, which was immediately di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 ₹ 9,26,588/- during the year to M/s.Gammon India Ltd., since entire work during the year was carried out by it. Similarly, there has been apportionment to either of the two companies or to both the companies in the earlier years also by the Assessing Officer for enabling them to claim TDS in respective cases. The assessee, vide its submission dated 22.04.2010, furnished the details which revealed that gross revenue from this contract receipts by joint venture was accounted for in case of either or both of the two companies who were members of the joint venture in all assessment years 2001-02 to 2008-09. It was further explained by the assessee that revenue sharing was not exactly 60:40 in each year since it depends on the relative work done in the particular year. Having explained the difference between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative 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 ofRadhasoami 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 was further contended that where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. It was also contended that Hon'ble Kerala High Court in the case of Manjunath Motor Service and Canara Public Conveyances, 197 ITR 321 (Kar.) observed that method adopted by the Assessing Officer would result in double taxation of the same income since gross receipts distributed amongst the two joint venture partners was included as receipts in their respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip 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 income jointly. It is not enough that the persons receive the income jointly. In the instant case, each of the two parties has agreed to bear its own loss or retain its own profit separately. Both have agreed to execute the job together for better co-operation in their relationship with the Chennai Port Trust. The intention was not to carry out any business in common, only a part of the job will be done by VOACZ according to its technical skill and capability. The other part of the contract will be executed by HCC. The total value of the contract was ₹ 2,62,01,03,120. the applicant's share of work was valued at ₹ 44,52,78,920 (17 per cent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and issue decided by the Tribunal in M/s. Swapnali RDS Joint Venture (supra), therefore, following the parity of reasoning, we uphold the order of the CIT(A). Consequently, the grounds of appeal raised by the Revenue are dismissed. 12. The facts and the issue in ITA nos.942 and 943/PN/2013, are identical to the facts and issue in ITA no.944/PN/2013 and our decision in ITA no.944/PN/2013, shall apply mutatis mutandis to ITA no.942 and 943/PN/2013. 13. In the result, all the appeals of the Revenue are dismissed. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the present case and that of Swapnali RDS Joint Venture (supra). In view of the aforesaid facts, we find no reason to interfere with the order of Ld.CIT(A). Thus the grounds of Revenue are dismissed. 8. In the result, appeal of the Revenue for A.Y. 2010-11 is dismissed. 9. As far as appeal for A.Y. 2011-12 is concerned, since both the parties before us have submitted that the facts of the case for the assessment year 2010-11 are identical to the facts of the case for A.Y. 2011-12, we, therefore, for similar rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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