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TMI Blog2020 (1) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2016 and the total income was determined at Rs. 28,61,50,770/- . Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A) who vide order dated 06.02.2017 (in appeal No.PN/CIT(A)- 4/82/2016-17) allowed the appeal of the assessee. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us and has raised the following grounds : "1. Whether on the facts and the circumstances of the case and in law the Ld.CIT(A) was correct in deleting the addition of Rs. 28,61,50,769/- made u/s 40(a)(ia) of the Income Tax Act, 1961 on account of payments made towards subcontract, when the assessee has failed to deduct TDS from such payments u/s 194C of the Income Tax Act, 1961. 2. For this and such other reasons as may be urged at the time of hearing, the order of the CIT(A) may be vacated and that of the Assessing Officer be restored." 3. During the course of assessment proceedings, AO noticed that assessee had received contract receipts at Rs. 28,61,50,769/- and the amount was distributed among the members as per the details on Page 2 at Para 5 of the order. AO noticed that on the amount that ws paid to the member companies, no TDS was deducted by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the assessee by observing as under : "6. 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 Co-ordinate 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 the present case, the issue arising before us is in relation to the application of provisions of section 40a(ia) of the Act. The assessee AOP had received contracts from third party which, in turn, was executed by the two members of AOP. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 distributed in the ratio of the share of the work done. The actual share in the joint venture of the total work allocated was 60% for M/s.Gammon India Ltd. and 40% for M/s.Progressive Contraction Ltd. In this background it was explained that the contract acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /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 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 cases of contract/subcontract, in the background of clauses of the agreement, the assessee relied on the decision of Hon'ble Himachal Pradesh High Court in the case of CIT vs. Ambuja Darla Kashlog Mangu Transport Cooperative Society (2009) 227 CTR 299 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 respective cases and the joint venture partners had also utilised the TDS credits on the basis of apportionment certificate issued by the Assessing Officer. In view of the above discussion, CIT(A) was justified in holding that in absence of any contract or subcontract work by joi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 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 cooperation 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 Rs. 2,62,01,03,120. the applicant's share of work was valued at Rs. 44,52,78,920 (17 per cent of total value). The association with the HCC was not with the object of earning this income but for co ordination in executing the contract so that HCC could also make its own profit. HHC's work and income arising therefrom was quite separate and independent of the applicant's work and income. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 reasons stated herein while disposing of the appeal for A.Y. 2010-11 and for similar reasons, dismiss the appeal of Revenue for A.Y. 2011-12 also. 10. In the result, the appeal of the Revenue for A.Y. 2011-12 is dismissed. 11. In the result, both the appeals of Revenue are dismissed." 6. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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