9911796707
TMI Blog2024 (9) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... - "1. The order of the learned Additional/Joint Commissioner of Income-tax (Appeals), Thane ('CIT(A)') dated 05.02.2024 for the Assessment Year 2019-20 is contrary to law, facts and in the circumstances of the case. 2. The learned CIT(A) has failed to understand the intention of insertion of section 167B of the Act and also erred in the interpretation of clause (ii) of the sub-section (2) of section 167B of the Act, explained vide CBDT Circular No. 551 dated 23.01.1990, as per which subsection (2) of section 167B will be applicable, only in cases where the shares of the members are determinate. 3. The learned CIT (A) while applying Section 167B(2)(ii) of the Act erred in stating that as per the said section Appellant was liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 Association of Persons (In short, the 'AOP'). The appellant/assessee filed its Income Tax Return (In short, the 'ITR') on 31.10.2019 declaring income of Rs. 3,87,56,280/-. The ITR was processed under section 143(1) of the Act, wherein the Assessing Officer (CPC-ITR) [In short, the 'AO') applied tax rate of 40% on entire taxable income of Rs. 3,87,56,280/- instead of 30% offered by the appellant/assessee on the reasoning that one of the members of the AOP; being Foreign Company, whose income is above the taxable limit, is paying tax @ 40%. The grievance is with respect to the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that the appellant/assessee had never been taxed @ 40% in the preceding and subsequent years. The Ld. AR with the help of processing under section 143(1) of the Act for AY 2018-19 2020-21 to 2023-24 demonstrated that the AO had applied the tax rate of 30% in all these years. Only the present case was exception. Accordingly, 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 Saras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociation or body are indeterminate or unknown, tax shall be charged on the total income of the association or body at the maximum marginal rate: Provided that, where the total income of any member of such association or body is chargeable to tax at a rate which is higher than the maximum marginal rate, tax shall be charged on the total income of the association or body at such higher rate. 2. Where, in the case of an association of persons or body of individuals as aforesaid [not being a case falling under sub-section (1),- (i) the total income of any member thereof for the previous year (excluding his share from such association or body) exceeds the maximum amount which is not chargeable to tax in the case of that member under the Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) Where member's income exceeds maximum amount not chargeable to tax (before including their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmit that the shares of members of the AOP needs examination/investigation to determine that whether the members' share in the AOP's profit is determinate. We are of the firm view that this issue cannot be examined/investigated under section 143(1) of the Act as it is beyond its scope. 9. In view of the above discussion, 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
