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TMI Blog2016 (8) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... e is shifted to a member of the joint venture through an overriding title, then credit of TDS in respect of such receipts should be considered in the hands of that member of the joint venture in whose hands such income is found assessable. - Decided in favour of the assessee - TAX APPEAL NO. 2434 of 2010 TO TAX APPEAL NO. 2437 of 2010 - - - Dated:- 11-8-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR SUDHIR M MEHTA, ADVOCATE FOR THE RESPONDENT : MR MANISH J SHAH, ADVOCATE COMMON ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) Since the appeal arises out of the common order passed by the ITAT, they are being heard and disposed of by this common oral judgment. 2. By way of this group of appeals, the department has challenged the order of the tribunal whereby the tribunal has reversed the order passed by the CIT (A) and AO. 3. Tax Appeal No.2435 of 2010 and Tax Appeal No.2436 of 2010 challenges the order passed by the ITAT dated 16/04/2010 in ITA No.3179/Ahd/2007 for assessment year 2004-05 and ITA No.3180/Ahd/2007 for assessment year 2005-06 respectively and came to be admitted on the following questions of law: (A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant itself has not disputed the existence of AOP and the income derived from the execution of Surat Manor toll way Project awarded to it by NHAI and thereby the AO concluded that the income of PEL arising out of the contract required to be added in the income of the AOP on principles of consistency. 6.2 Learned Counsel for the appellant has taken this Court to the findings of CIT (A), more particularly, paragraph Nos.7.3, 8.2, 10.3, 12.3 and 13.2 and contended that the said findings are just and proper and the tribunal need not require to interfere with the same. 6.3 After making the above submissions, learned Counsel for the appellant has contended that the appeal may be allowed and questions may be answered in favour of the assessee. 7. On the other hand, Mr.Manish J Shah, learned Counsel for the assessee has contended that the basis on which the expenses were allowed, in fact it was added in the income as profit. He has further contended that the view taken by the tribunal is just and proper and the tribunal has considered the detail material in its order and he has placed reliance on the following paragraphs of the order passed by the tribunal: 9. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement of Interim Payment Application, approved or certified Statement thereof and any Other material and information which are requested by LGE C or related to LGE C's interest. (3) *** (4) *** (5) *** (6) *** 10. A reading of the above clauses of agreement dated 2902 clearly provides that LGE C shall not have any responsibility, liability, obligation, or duty towards revenue work transferred to PEL which shall indemnify LGE C against such liability/obligation or loss. LGE C will remove itself from the site. However Patel will permit the employees to LGE C to visit the site but the cost thereof shall not be borne by Patel. Patel will receive all the dues from NHAI and receipts from NHAI will be to Patel's account. LGE C would be paid some compensation of ₹ 2.6 crores for transfer to remaining portion of work to Patel, which would be paid at the end of the contract by Patel. 11. Thus, after withdrawal of LGE C from the association, no association of persons survived even though legally joint venture continued to exist till the completion of the work. Merely because joint venture is existing, it does not necessarily lead to inferenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ryana High Court in CIT vs. Sehgal Oil General Mills (2008) 303 ITR102( P H) where emphasis was laid down on volition on the part of the members of the association as an essential ingredient. Voluntarily combining together for a certain purpose i.e. to earn income is considered as essential ingredient, of AOP being an existence. In that case, a firm was constituted by S, main partner and his sons. It continued up to A.Y. 1981-82 as per the last partnership deed which was executed on December 28, 1968. The main source of income of the assessee firm was form the shares held by S in the firm LE. Subsequently, firm LE was converted into Private Ltd. Company named LV and shares held by S was converted into equity capital on which dividends were received with interest on deposits held in the name of S in LV. S expired on April 11, 1982. It was claimed by the assessee that no business is done thereafter and the firm is to be dissolved by the operation of law on death of S. However, A.O. completed the assessment in the status of AOP in respect of income received from LV by including remaining partners as members of Association. It was held by Hon'ble High Court that there was no act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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