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TMI Blog2014 (5) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon purpose or common action and there is a joint management or joint action by the two or more persons - In order to treat persons as an association, it is necessary that the members must have a common intention and must act jointly for fulfilling the object of their joint enterprise. The matter was not examined in the light by the Authority for Advance Rulings, it would be appropriate that the matter with regard to the question of AOP is remitted to the Authority to return a finding based upon the above legal principles - matter remanded back – Decided in favour of Assessee. - W.P.(C) 4302/2013 & CM 9996/2013 - - - Dated:- 20-5-2014 - MR BADAR DURREZ AHMED AND MR SIDDHARTH MRIDUL, JJ. For the Petitioner : Mr Deepak Chopra wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awarded by Petronet. Whether the consortium's object is to derive profit or share the profit in a particular manner is not relevant in'view of the fiction created under the Explanation to section 2(31) of the Act. The responsibilities of the consortium members mentionecr under the terms of the contract would also not affect conferring AOP status to the consortium in view of the formation of a consortium by CINDA and CTCI. That being so, the applicant can be said to have a business connection in India for the purpose of application of section 9(1) of the Act. As the applicant is excluded from the relief under section 90(2) of the Act, the fiscal jurisdiction to tax the offshore supplies would be governed under the Act. 4. The ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has the trappings of a partnership for conducting the joint enterprise which makes it amenable to be treated as a separate taxable entity. A person carrying on business may in the usual course cooperate with others for a common purpose. In many instances, the test of common purpose and common action, if literally applied, may also hold true. However, treating every instance of such cooperation between two or more persons as resulting in an Association of Persons would militate against the purpose of considering an association as a separate tax entity. Whether an arrangement or collaborative exercise between two or more persons results in constituting an Association of Persons as a separate taxable entity would depend on the facts of each c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement. (iv) the cooperation and association amongst the constituent members must not be perfunctory and/or merely in form. The association amongst members must be real and substantial which is sufficient to treat the association as a separate homogenous taxable entity. 6. The question as to whether the petitioner herein and CINDA constituted an AOP would have to be examined on the basis of the above principles. Since the matter was not examined in this light by the Authority for Advance Rulings, it would be appropriate that the matter with regard to the question of AOP is remitted to the said Authority to return a finding, on facts, based upon the above legal principles. It is ordered accordingly. 7. We make it clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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