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TMI Blog2024 (9) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... nd both members income without including their income from AOP are chargeable to tax. The ITR also reveals that the TPL is the domestic company and Chint is a Chinese company. It emerges that the income of TPL is chargeable to tax @ MMR (30%) and that of Chint at the rate higher than MMR (@ 40%) as it is a foreign company. By placing reliance on the order in the case of Herve Pomerleau International CCCL Joint Venture [ 2019 (10) TMI 1167 - ITAT CHENNAI] DR has raised the issue that whether the members share in the AOP s profit is determinate and the Long-term Agreement, MOU, Consortium Agreements, Profit sharing Agreement, etc. between the member of AOP contain the clause relating to profit sharing of the members of AOP. We are of the considered opinion that the total income of Chint, without including the income from the appellant/ assessee AOP, is chargeable to tax @ 40% plus surcharge, plus Education Cess plus Secondary and Higher Education Cess as applicable on its total income; therefore, the tax shall be charged on that portion or on the part of income of AOP which is relatable to the share of Chintat such a higher rate (40%) plus surcharge, plus Education Cess plus Secondar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018-19 wherein section 167B(2)(ii) of the Act has been correctly applied by the Assessing Officer in the Appellant's own case. 5. The learned CIT(A) erred in confirming the levy of interest of Rs. 46,347/- under section 234A of the Act stating that the ground is not adjudicated separately being consequential in nature. 6. The learned CIT(A) erred in confirming the levy of interest of Rs. 10,20,561/- under section 234B of the Act stating that the ground is not adjudicated separately being consequential in nature. 7. The learned CIT(A) erred in confirming the levy of interest of Rs. 2,34,053/- under section 234C of the Act stating that the ground is not adjudicated separately being consequential in nature. 2.1 In nutshell, the appellant/assessee had challenged the applicability of tax @ 40% along with surcharge cess on its total income alongwith the levy of consequential interest under section 234A, 234B and 234C of the Income Tax Act, 1961 (in short the Act ). 3. In brief, the facts of the case relevant for deciding this appeal are that it is a joint venture between TATA Projects Limited (In short, the TPL ) and Chint Electric Company Ltd. (In short, the Chint ). It is an Assoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, he prayed for applicability of tax rate of 30% keeping in view the principle of consistency laid down by various judicial pronouncements. In support of the contention, the Ld. AR placed reliance on the decisions in the cases of Madhukar C Ashar 69 taxmann.com 221 (Bom), Salarpuria Simplex Dewelling LLP 143 taxmann 35 (Cal), Gujrat Narmada Valley Fertilizers Co. Ltd. 42 taxmann 438 (Guj) and Swami Onkaranad Saraswati Charitable Trust 150 taxmann 428 (Alld).The Ld. AR also drew our attention to the assessment order passed under section 143(3) of the Act in the case of the appellant/assessee for AY 2018-19 wherein the tax rate of 30% was applied. 5. The Ld. Senior Departmental Representative (In short, the Sr. DR ) reiterated the appellate order and submitted that the appellant/assessee did not demonstrate the share of profit in the net profit of the appellant/assessee AOP and thus, prayed for dismissal of the appeal. In support of his contention the Ld. Sr. DR placed reliance on the order dated 21.10.2019 of the ITAT, Chennai in the case of Herve Pomerleau International CCCL Joint Venture in the ITA Nos. 1008/CHNY/2017 and the ITA Nos. 17, 18, 19/CHNY/2019 for AY 2010-11 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nown on the date of formation of such association or body or at any time thereafter. 7. From the plain reading of the section 167B of the Act, it is evident that the taxability of an AOP is based on whether the share of its members is determinate or not. When the share of members of the AOP is indeterminate, then tax is charged at a Maximum Marginal Rate (In short, the 'MMR') orat a rate higher than MMR in case one of the member s income is chargeable to tax at a rate higher than MMR. MMR is defined under the Act as the rate of income-tax (including surcharge cess on income-tax, if any) applicable to the highest income slab for an individual, AOP or Body of Individuals. On the other hand, when the member's share is determinate, the income in hands of such an AOP shall be computed based on the following three situations: (i) Where member's income exceeds maximum amount not chargeable to tax (before including their share of AOP's income), the tax is charged at the MMR in the hands of such an AOP. (ii) Where member's income is less than the maximum amount not chargeable to tax, the income is taxed in the hands of AOP at tax rates applicable to individuals. (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X
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