High Court Of Bombay
CIT vs. SMSL-UANRCL (JV)
Section 4
B.P. Dharmadhikari And A.P. Bhangale, JJ.
IT Appeal No. 44 Of 2013
March 2, 2015
JUDGMENT
B.P. Dharmadhikari, J. – Heard advocate, Shri Anand Parchure, for the appellant and advocate, Shri N. S. Bhattad, for the respondent.
2. The following two questions are sought to be urged by the appellant :
“(1) Whether, in the facts of the case and in law, the hon’ble Income-tax Appellate Tribunal was correct in holding that the entire income earned by the joint venture company is liable to be taxed in the hands of one of the members of the assessee-company without appreciating the fact that the contract was awarded to the assessee-company and not to the individual member of the assessee-company ?
(2) Whether, on the facts of the case and in law, the hon’ble Income-tax Appellate Tribunal was correct in not applying the principle laid down by the Supreme Court in the case of C. H. Atchaiah [1996] 218 ITR 239 (SC) and the Madras High Court in the case of Murugesa Naicker Mansion reported in [2000] 244 ITR 461 (Mad) wherein it was held that the Assessing Officer is not precluded from taxing the right person merely on the ground that a wrong person is taxable ?”
3. The Income-tax Appellate Tribunal, Nagpur (“the ITAT”), has as a matter of fact found that the assessee-joint venture did not execute the contract work and the said work was done by one of its constituents, namely, SMS Infrastructure Ltd. It is also found that the receipts for the said project work are reflected in the books of account of SMS Infrastructure Ltd. and in return, the said SMS Infrastructure Ltd. has disclosed that income. The said return was accepted by the Assessing Officer in the assessment made under section 153A read with section 143(3) of the Income-tax Act, 1961. It found that, therefore, the same income could not have been taxed again in the hands of the joint venture-assessee.
4. Efforts of the advocate, Shri Anand Parchure, is to demonstrate that the contract was entered by the joint venture, the joint venture has received the consideration and then parted with part of the work in favour of one of its constituents, namely, SMS Infrastructure Ltd. By inviting our attention to change in the legal position in view of the amendment to section 3 of the Act of 1961 as compared to the Act of 1922, he submits that the assessment, therefore, ought to have been done of the assessee-joint venture company for the entire sum and, thereafter, for part of it paid to SMS Infrastructure Ltd. of the constituent. He also states that the Assessing Officer cannot refuse to tax the right person because the wrong person has been taxed. He submits that otherwise there was no reason for the assessee to show TDS.
5. Advocate, Shri N. S. Bhattad, relies upon the findings recorded by the Income-tax Appellate Tribunal in paragraph 7 to urge those findings are concurrent findings of fact and are not perverse.
6. The assessee-joint venture had filed return of income of Rs. 2,19,990 and claimed TDS of Rs. 30,14,718. When a query was raised by the Assessing Officer about the receipts for the project work in respect of TDS certificate or its non-mention in the profit and loss account of the joint venture-assessee, it submitted that due to oversight and inadvertently the credit of TDS was shown by it. It requested and sought leave to withdraw the claim of TDS.
7. If the TDS claim was not erroneous, the income could have been shown in the account of the joint venture-assessee. If leave to withdraw was being sought with some ulterior motive, the income would have been reflected in the account of the joint venture-assessee. The consideration either by the Assessing Officer or the appellate authorities does not show this position. On the other hand, the Assessing Officer has worked out income-tax at 3 per cent of the contract value at the hands of the joint venture-assessee. Such guess work would not have been essential, had the assessee actually received the amounts and those amounts would have been reflected in the books of account. The Department would have procured some material to show receipts by the assessee towards contract. There is no finding of receipt of any income by the joint venture-assessee on account of the said contract.
8. The finding of fact, therefore, reached by the Commissioner of Income-tax (Appeals)-I, Nagpur (“the CIT(A)”) and sustained by the Income-tax Appellate Tribunal cannot be said to be perverse.
9. In the light of this discussion, we find that the abovementioned questions which ignore this finding of fact does not arise for determination and cannot be said to be substantial questions of law arising out of the impugned order.
10. The income-tax appeal is, accordingly, rejected. No costs.
[Citation : 372 ITR 429]
