9911796707
TMI Blog2018 (9) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record to suggest that ITD has provided any real services under the contract except lending its association / name against which it has been paid impugned leadership fees @3.5%. The assessee, all along has justified the same on the ground of commercial expediency. However, we find that the assessee was an AOP and the provisions of Section 40(ba) specifically disallow payment made by AOP to its member on account of interest, salary, bonus, commission or remuneration, by whatever name called. Secondly, upon careful consideration of the factual matrix, we find that the impugned payment were mere appropriation of profits and could not be allowed as a deductible expenditure. The share of the contract receipts was predetermined and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sole subject matter of this appeal. 2. The material on record reveals that the assessee AOP is consortium / Joint Venture between M/s Pratibha Industries Limited [in short Pratibha ] M/s Italian-Thai Development Public Company Limited, [a company incorporated in Thailand] [in short ITD] vide deed of agreement dated 14/01/2007. The Joint Venture has undertaken contract work from Airport Authority of India [AAI] vide agreement dated 31/03/2008. The contract was awarded by AAI to the Assessee vide acceptance letter dated 02/02/2007 and contract agreement dated 08/02/2007. The contract was related with construction of New International Terminal Building at Ahmedabad Airport. 3. In terms of Internal consortium agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, during assessment proceedings, defended the same before Ld. AO on the plea of business expediency. At the same time, the assessee sought direction of Ld. JCIT-17(2) in terms of Section-144A wherein Ld. JCIT, inter-alia, concluded that the profits, if any, should be distributed to the members of AOP only after the payment of taxes and further no payment should be made to the members before payment of tax if no services for the same has been rendered by its members. The assessee defended the same by raising various contentions, which have been extracted in the quantum assessment order. However, not convinced, Ld. AO disallowed the same in terms of Section 37(1) and added it to the income of the assessee. 5. The assessee reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord to suggest that ITD has provided any real services under the contract except lending its association / name against which it has been paid impugned leadership fees @3.5%. The assessee, all along has justified the same on the ground of commercial expediency. However, we find that the assessee was an AOP and the provisions of Section 40(ba) specifically disallow payment made by AOP to its member on account of interest, salary, bonus, commission or remuneration, by whatever name called. Secondly, upon careful consideration of the factual matrix, we find that the impugned payment were mere appropriation of profits and could not be allowed as a deductible expenditure. The share of the contract receipts was predetermined and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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