M/s. PCL-MVR Joint Venture, Hyderabad V. DCIT, Cir-16(3), Hyderabad

ITA 1517/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66300 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 24-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N V RAMANA RAO
• Assessee Lawyers: V RAGHAVENDRA RAO
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1556/HYD/2010 ASSESSMENT YEAR : 2007-08 ASSTT. COMMISSIONER OF INCOME-TAX, APPELLANT CIRCLE 16(3), HYDERABAD. VS. PCL-STICCO JOINT VENTURE, RESPONDENT HYDERABAD (PAN AAAAP1488N ) ITA NO. 1517/HYD/2011 ASSESSMENT YEAR : 2007-08 PCL MVR JOINT VENTURE, APPELLANT HYDERABAD (PAN AAAAP5541J) VS. DY. COMMISSIONER OF INCOME-TAX, RESPONDEN T CIRCLE 16(3), HYDERABAD REVENUE BY : SHRI. N.V. RAMANA RAO ASSESSEE BY : SHRI V. RAGHAVENDRA RAO DATE OF HEARING : 2/08/2012 DATE OF PRONOUNCEMENT : 2 1/09/2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: BOTH THESE APPEALS FILED BY THE REVENUE AS WELL AS ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A) FOR ASSES SMENT YEAR 2007-08. SINCE IDENTICAL ISSUE IS INVOLVED IN BOTH THESE APP EALS, WE DISPOSE OF THESE APPEALS BY WAY OF A COMMON ORDER. 2 ITA NOS. 1556/HYD/2010 & 1517/HYD/11 M/S PCL STICCO JV & PCL MVR JV 2 ITA NO. 1556/HYD/2010 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL: 1. THE HONBLE CIT(A) ERRED IN DELETING THE ADDITIO N MADE BY THE AO THOUGH THE CONTRACT WAS AWARDED TO THE ASSESSEE AND BILLS WERE SUBMITTED BY IT AND THE ASSESSEE HAD DISTRIBUTED TH E CONTRACT WORK TO ITS MEMBERS WITHOUT RETAINING CERTAIN COMMISSION WHICH IS IN VIOLATION OF MARKET PRINCIPLES AND HENCE THE AO WAS RIGHT IN ESTIMATING THE TOTAL INCOME OF THE ASSESSEE AT 2% O F TOTAL CONTRACT RECEIPTS. 2. THE HONBLE CIT(A) ERRED IN HOLDING THAT THE PRO VISIONS OF SECTION 145 OF IT ACT CANNOT BE INVOKED AS NO DEFECT HAS BE EN FOUND IN THE BOOKS OF ACCOUNT THOUGH IN THE PRESENT CASE NO PROP ER BOOKS OF ACCOUNTS WERE MAINTAINED BY THE ASSESSEE AND AS PER THE PROVISIONS OF SECTION 145(3) OF IT ACT THE AO SHALL BE SATISFI ED ABOUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS IN ASSOCIATION OF PERSONS CONSISTING OF M/S PROGRESSIVE CONSTRUCTI ONS LTD. (PC) AND M/S SAUDI A1-TERAIS TRADING INDUSTRIAL CONSTRUCTION COM PANY LTD. (STICCO) CONSTITUTED UNDER A JOINT VENTURE AGREEMENT. IT WAS CLAIMED IN THE RETURN OF INCOME THAT AFTER GETTING THE CONTRACT ALLOTTED, THE JOINT VENTURE (JV) HAD IN TURN DISTRIBUTED THE WORK AMONG THE CONSTITU ENTS (MEMBERS OF THE JV) IN THE RATIO OF 99.5% TO M/S PCL AND 0.5% TO M/ S STICCO ON THE BASIS OF SUBSEQUENT JOINT VENTURE AGREEMENT (SVJA) DATED 09/07/2001, SUPERSEDING THE EARLIER MEMORANDUM OF UNDERSTANDING (MOU) DATED 06/07/2001. THE JV WAS AWARDED A CONTRACT WORK OF W IDENING TO 4/6 LANES AND STRENGTHENING OF THE EXISTING 2 LANE CARR IAGE WAY OF NH-5 IN THE STATE OF ORISSA FROM KM 284.000 TO KM 338.000 ( GANJAN SUNAKHALA PROJECT CHAINAGE KM 384.00 TO KM 339.713) CONTRAC T PACKAGE OR VII BY NATIONAL HIGHWAYS AUTHORITY OF INDIA (NHAI). 4. AS PER THE JVA DATED 27/03/2001, THE INTEREST IN THE WORKS AND THE PROFIT OR LOSS ARISING OUT OF EXECUTION OF SUCH WORK, WERE SPECIFIED TO BE IN THE RATIO OF 75:25 BETWEEN PCL AND STICCO RES PECTIVELY. IT WAS EXPRESSLY PROVIDED IN THIS AGREEMENT THAT THE WORK SHOULD BE EXECUTED BY THE PARTNERS IN JOINT VENTURES WITH PCL AS LEAD PA RTNER WITH JOINT AND SEVERAL RESPONSIBILITIES. 3 ITA NOS. 1556/HYD/2010 & 1517/HYD/11 M/S PCL STICCO JV & PCL MVR JV 3 5. ON 06/07/2001, THE JV PARTNERS ENTERED INTO A SU PPLEMENTARY MEMORANDUM OF UNDERSTANDING (SMOU) WAS ENTERED INTO BETWEEN THE JV PARTNERS TO INCORPORATE CERTAIN TERMS AND CONDITION S IN THE ORIGINAL MOU DATED 27/01/2001. THIS SMOU LAID DOWN THAT STICCO W OULD SUBLET THEIR SHARE OF 25% WORK TO PCL AND THE PCL SHALL EXECUTE 100% OF THE WORK AWARDED. 6. AFTER EVALUATING THE RELEVANT DOCUMENTS FURNISH ED BY THE RESPECTIVE JV PARTNERS AT PRE-BID QUALIFICATION STA GE, AS STIPULATED IN CLAUSE 5 OF INSTRUCTIONS TO BIDDERS (TB) AND ALSO O N THE BASIS OF JV AGREEMENT DATED 27/03/2001, THE JV WAS AWARDED THE ABOVE CONTRACT WORKS FOR RS. 163,26,28,551/- (INCLUDING THE COST O F PROVISIONAL SUM AND DAY WORKS I.E. BILL NOS. 11 & 12 OF VOL.3 OF TENDE R DOCUMENT). HOWEVER, EXCLUDING THE SAID PROVISIONAL WORKS, THE PRICE OF CONTRACT WAS FIXED AT RS. 158,27,67,622/-, SUBJECT TO EVALUATION OF THE J VS EQUIPMENT AND PERSONNEL CAPACITY FOR WHICH THE JV WAS REQUIRED TO TAKE SUITABLE ACTION AND SUBMIT MORE DETAILS AND THAT THE ASSESSEE SHOUL D CONFIRM THAT JV AGREEMENT FURNISHED WITH THE BID FULFILLS THE PRESC RIBED REQUIREMENTS AS PER THE BID DOCUMENT AND THE CRITERIA LAID DOWN WHI LE QUALIFYING THE JV AT PRE-QUALIFICATION STAGE. IT WAS MADE CLEAR THAT IF IT DOES NOT CONFIRM TO THAT, IT SHALL BE SUITABLY AMENDED AND SUBMITTED TO NHAI. THIS ACCEPTANCE OF BIDS WAS COMMUNICATED TO JV BY NHAI, THE EMPLOYER, THROUGH THEIR LETTER OF ACCEPTANCE (LOA) DATED 09/0 7/2001. 7. IN THE RETURN OF INCOME FILED BY THE ASSESSEE TH E CONTRACT RECEIPTS OF RS. 8,71,43,802/- WERE SHOWN TO HAVE BEEN SHARED BY PCL AND STICCO IN THE RATIO OF 99.5% (RS. 8,67,08,084/- AND 0.5% (RS. 4,35,718/-) RESPECTIVELY. SIMILARLY ALL THE ADVANCE S, DEPOSITS, TDS, SALES TAX, SUNDRY DEBTORS AND BANK BALANCES IN THE BALANC E SHEET WERE SHOWN TO HAVE BEEN SHARED BY THE RESPECTIVE PARTNERS IN T HE SAME PROPORTION. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO WAS OF THE VIEW THAT THE WORK WAS EXECUTED BY THE ASSESSEE THR OUGH ITS MEMBERS WHO ARE TO BE TREATED AS SUB-CONTRACTORS FOR THE EX TENT OF WORK EXECUTED BY EACH MEMBER. HE OBSERVED THAT THE WORK HAD BEEN SPLIT INTO TWO 4 ITA NOS. 1556/HYD/2010 & 1517/HYD/11 M/S PCL STICCO JV & PCL MVR JV 4 PORTIONS AND ENTRUSTED TO ITS MEMBERS. HE ACCORDING LY HELD THAT THE CONTRACT RECEIPTS RECEIVED FROM NHAI AND SUBSEQUENT LY PASSED ON TO INDIVIDUAL MEMBERS AS PER THE SUBSEQUENT AGREEMENT AMOUNTED TO EXPENDITURE INCURRED BY THE ASSESSEE IN THE EXECUTI ON OF CONTRACT WORK AND SUCH EXPENDITURE IS EXCESSIVE AND UNREASONABLE. THEREFORE, 2% OF THE ABOVE MENTIONED PAYMENT IS TO BE TREATED AS EXC ESSIVE AND UNREASONABLE AND DISALLOWED. ALTERNATIVELY, 2% OF T HE RECEIPTS SHOULD BE ESTIMATED AS NET INCOME CLEAR OF ALL EXPENSES OF TH E ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 145 OF THE ACT. IN VIEW O F THE AFORESAID REASONS, THE AO ESTIMATED THE INCOME OF THE ASSESSEE AT 2% O F THE TOTAL CONTRACT RECEIPTS AT RS. 17,42,876/-. AGGRIEVED BY THE ORD ER OF THE AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A). 9. BEFORE THE CIT(A), THE ASSESSEE ARGUED THAT THE JV EXECUTED THE CONTRACT BY DIVIDING THE WORK BETWEEN THE MEMBERS A ND SHARING THE RECEIPTS IN ACCORDANCE WITH TERMS OF SUPPLEMENTARY JV AGREEMENT AND INCOME HAD ACCRUED AND ARISEN TO THE MEMBERS IN THE IR OWN RIGHT ON THE BASIS OF SVJA AND THERE WAS NO INCOME EARNED BY THE JV. HE FURTHER STATED THAT AN IDENTICAL ISSUE IN THE CASE OF THE A SSESSEE FOR AYS 2002- 03, 2003-04, 2004-05, 2005-06 & 2006-07 WAS DECIDED IN ASSESSEES FAVOUR. AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE, THE CIT(A) FOLLOWING THE DECISION OF HIS PREDECESSOR (CIT(A) I N ASSESSEES OWN CASE FOR AY 2006-07, HELD THAT NO INCOME IS ASSESSABLE I N THE HANDS OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 10. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE CANVASSED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY TH E DECISION OF THE COORDINATE BENCH IN THE CASE OF DCIT VS. M/S PCL SU NCON JOINT VENTURE, FOR AY 2005-06 IN ITA NO. 149/HYD/2008 & ITA NO. 15 0/HYD/08 IN THE CASE OF DCIT VS. M/S PCL STICCO JV VIDE ORDER DATED 11/04/2012. A COPY OF THE SAID ORDER IS AVAILABLE ON RECORD. THE LEARN ED DR, ON THE OTHER HAND, CONCEDED WITH THE SUBMISSION OF THE LEARNED C OUNSEL FOR THE ASSESSEE. 5 ITA NOS. 1556/HYD/2010 & 1517/HYD/11 M/S PCL STICCO JV & PCL MVR JV 5 11 THE LEARNED COUNSEL FOR THE ASSESSEE SHRI RAGHAV ENDRA RAO, REITERATED BEFORE US THAT THE JV EXECUTED THE CONTR ACT BY DIVIDING THE WORK BETWEEN THE MEMBERS AND SHARING THE RECEIPTS I N ACCORDANCE WITH TERMS OF SUPPLEMENTARY JV AGREEMENT AND INCOME HAD ACCRUED AND ARISEN TO THE MEMBERS IN THEIR OWN RIGHT ON THE BAS IS OF SVJA AND THERE WAS NO INCOME EARNED BY THE JV. 12. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE REC ORD AND GONE THROUGH THE ORDERS O THE AUTHORITIES BELOW. THE LE ARNED COUNSEL FOR THE ASSESSEE SHRI RAGHAVENDRA RAO HAS ALSO SUBMITTED IN THE PAPER BOOK THE DETAILS OF CONTRACT RECEIPTS AND PROFIT & LOSS ACCO UNT. HE ALSO REITERATED THAT NO INCOME IS EARNED BY THE JV AND THE INCOME H AS ARISEN TO THE MEMBERS INDIVIDUALLY. IN THESE CIRCUMSTANCES, WE RE STORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO VERIFY WHETHER THE CORRESPONDING INCOMES AS PER THE ALLOTMENT OF JV AGREEMENTS HAS BEEN OFFE RED IN THE INDIVIDUAL (CONSTITUENTS) HANDS AND, IF SO, IT CANNOT BE TAXE D IN THE HANDS OF THE JV, NAMELY, THE ASSESSEE. HENCE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1517/HYD/2011 14. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW . 2. THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN ASSES SING THE INCOME OF THE ASSESSEE @ 2% OF THE CONTRACT RECEIPT S OF RS. 23,34,23,083/-. 3(A) THE LOWER AUTHORITIES FAILED TO APPRECIATE THA T NO INCOME ACCRUED OR AROSE TO THE JOINT VENTURE AOP U/S 5(1 ) OF THE ACT, 1961. 3(B) THE ASSESSMENT HAS BEEN MADE ON HYPOTHETICAL B ASIS BY SURMISING WHAT COULD HAVE BEEN EARNED BUT NOT EARNE D BY THE 6 ITA NOS. 1556/HYD/2010 & 1517/HYD/11 M/S PCL STICCO JV & PCL MVR JV 6 ASSESSEE. SUCH AN ASSESSMENT IS NOT AT ALL JUSTIFIE D EITHER ON FACTS OR IN LAW. 4. THE LOWER AUTHORITIES HAVE ERRED IN APPLYING PRO VISIONS OF SECTION 40A(2). THEY OUGHT TO HAVE FOLLOWED THE BOA RD CIRCULAR ISSUED NO. 6-P(LXVVI-66) OF 1968, DATED 06/07/1968. PARAS 73-75. 5. THE LOWER AUTHORITIES HAVE ERRED IN APPLYING THE PROVISIONS OF SECTION 145(3) OF THE ACT, SINCE THE ACCOUNTS OF THE ASSESSEE ARE CORRECT AND COMPLETE. 15. THE ASSESSEE NAMED PCL-MVR JOINT VENTURE, ADM ITTING ITS STATUS AS AN ASSOCIATION OF PERSONS (AOP), FILED ITS RETURN OF INCOME FOR THE AY 2007-08 ON 30/10/07 DECLARING NI L INCOME. IN THE RETURN OF INCOME, THE ASSESSEE HAD SHOWN CONTRA CT RECEIPTS AT RS. 23,34,23,083/- AND THE SAME WAS SHOWN AS DISTRI BUTED TO JOINT VENTURE PARTNERS PCL AT RS. 23,05,05,294/- AND MVR AT RS. 29,17,789/-. SIMILARLY ALL THE ADVANCES, DEPOSITS, TDS, SALES TAX, SUNDRY DEBTORS AND BANK BALANCES IN THE BALANCE SHE ET WERE SHOWN TO HAVE BEEN SHARED BY THE RESPECTIVE PARTNERS IN T HE SAME PROPORTION. AFTER PROCESSING THE RETURN U/S 143(1) OF THE ACT, THE SAME WAS SELECTED FOR SCRUTINY ASSESSMENT. DURING T HE SCRUTINY PROCEEDINGS, THE AO NOTICED THAT THE PCL AND MVR HA D FORMED A JOINT VENTURE TO UNDERTAKE CONTRACT WORK FROM NATIO NAL HIGHWAYS AUTHORITY OF INDIA. THE JV WAS FORMED FOR THE PURPO SE OF PRE- QUALIFICATION BID SUBMITTED TO NHAI FOR MAKING OF F OUR LANES AND STRENGTHENING OF NH-28 FROM KM 402.000 TO KM440.000 IN BIHAR AND MAKING FOUR LANES AND STRENGTHENING OF NH-28 FR OM KM 480.00 TO KM 520.000 IN BIHAR. AFTER CONSIDERING THE DOCUM ENTS PERTAINING TO THE ABOVE WORK SUBMITTED BY THE ASSESSEE, THE AO OBSERVED THAT THE JV HAVING EXECUTED THE WORK, THE ASSESSEE WAS R EQUIRED TO RECOGNIZE ITS PART OF INCOME FROM THE SAID CONTRACT WORK. HOWEVER, AS THE ASSESSEE HAD NOT OFFERED ANY INCOME FOR TAXA TION, THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY ITS INCOME SHOULD NOT BE ESTIMATED AT 2% OF THE CONTRACT RECEIPTS AMOUNTS PA ID TO PCL AND 7 ITA NOS. 1556/HYD/2010 & 1517/HYD/11 M/S PCL STICCO JV & PCL MVR JV 7 FURTHER DISALLOWING THE ENTIRE AMOUNT CLAIMED TO HA VE BEEN PAID TO THE OTHER PARTNER MVR. IN REPLY, THE ASSESSEE SUBMI TTED THAT AS PER SUPPLEMENTARY JOINT VENTURE AGREEMENT EXECUTED BETW EEN THE PARTNERS, THE GROSS CONTRACT RECEIPTS HAD BEEN DIST RIBUTED BETWEEN THE TWO MEMBERS, NAMELY, PCL AND MVR IN THE RATIO O F 98.75% TO 1.25% FOR EXECUTING THE WORK INDEPENDENTLY. IT WAS CONTENDED THAT SINCE THE JV HAD NOT CARRIED OUT ANY ACTIVITY, EXCE PT TRANSFERRING THE AMOUNTS RECEIVED FROM NHAI TO ITS MEMBERS, IT H AD NOT DERIVED ANY INCOME. IT WAS FURTHER CONTENDED THAT THE ENTIR E INCOME DERIVED FROM THE ABOVE CONTRACT WAS ASSESSABLE IN THE HANDS OF THE MEMBERS OF THE JV. IT WAS SUBMITTED THAT JV HAD MAI NTAINED PROPER BOOKS OF ACCOUNT AND IT HAD NO INCOME AS WAS BORNE OUT OF THE SAME. HOWEVER, THE AO DID NOT ACCEPT THE SAID SUBMI SSIONS MADE BY THE ASSESSEE AND HELD THAT THE PAYMENTS MADE TO THE MEMBERS CONSTITUTED EXPENDITURE FOR WORK EXECUTED BY THEM A S SUB- CONTRACTORS. HE NOTED THAT THE CONTRACT RECEIPTS, R ECEIVED FROM NHAI CONSTITUTE REVENUE RECEIPTS AND THE AMOUNTS DISBURS ED BY THE ASSESSEE FOR GETTING THE WORK DONE AS ITS EXPENSES. THE AO HELD THAT IF AN UNRELATED PARTY WAS TO TAKE UP THE JOB O F CARRYING OUT THE WORK AS LAID DOWN IN SCHEDULE A AND B AND SUCH THIR D PARTY HAD BEEN A PERSON AT ARMS-LENGTH, THE ASSESSEE WOULD CERTAINLY HAVE DERIVED INCOME FOR THE SERVICES RENDERED TO SUCH OU TSIDER AND ACCORDINGLY ESTIMATED 2% OF THE GROSS RECEIPTS AMOU NTING TO RS. 46,68,462/-. FURTHER, ALTERNATIVELY, INVOKING THE P ROVISIONS OF SECTION 145 OF THE ACT, 2% OF THE RECEIPTS ATTRIBUT ABLE TO WORK ESTIMATED AS NET INCOME OF THE ASSESSEE FROM THE PO RTION OF THE WORK RECEIPTS. AGGRIEVED BY THE ORDER OF THE AO, TH E ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 16. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THE AO IS NOT CORRECT IN HOLDING THAT THE INCOME ACCRUED TO THE J V U/S 5 OF THE ACT AND THE SAME IS ASSESSABLE IN THE HANDS OF THE JV U/S 4 OF THE 8 ITA NOS. 1556/HYD/2010 & 1517/HYD/11 M/S PCL STICCO JV & PCL MVR JV 8 ACT. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE, THE CIT(A) FOLLOWING THE DECISION OF HIS PREDECESSOR IN THE CA SE OF PCL INTERTECH LENHYDRO CONSORTIUM JV FOR AY 2005-06 ORD ER DATED 31/12/2008, CONFIRMED THE ACTION OF THE AO. AGGRIEV ED BY THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 17. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED B Y THE DECISION OF THE COORDINATE BENCH IN THE CASE OF DCIT VS. M/S PC L STICCO JV (SUPRA). THE LEARNED DR DID NOT CONTROVERT THE FACT S AVAILABLE ON RECORD. 18. AFTER HEARING THE PARTIES AND PERUSING THE RECO RD, WE FIND THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DEC ISION OF THE COORDINATE BENCH IN THE CASE OF PCL STICCO JV (SUPR A) WHEREIN THE COORDINATE BENCH FOLLOWING THE DECISION OF ANOTHER COORDINATE BENCH IN THE CASE OF M/S LIMAK SOMA JV IN ITA NO. 498 TO 599/HYD/2006, DISMISSED THE APPEAL OF THE REVENUE. RESPECTFULLY FOLLOWING THE DECISION OF THE SAID COORDINATE BENCH IN THE CASE OF PCL STICCO JV(SUPRA), WE SET ASIDE THE ORDER OF THE CIT(A) AND HOLD THAT NO INCOME IS ASSESSABLE IN THE HANDS OF THE A SSESSEE. THEREFORE, THE ADDITION MADE BY THE AO ON THIS COUN T IS HEREBY DELETED. 19. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE REC ORD AND GONE THROUGH THE ORDERS O THE AUTHORITIES BELOW. THE LE ARNED COUNSEL FOR THE ASSESSEE SHRI RAGHAVENDRA RAO HAS ALSO SUBMITTED IN THE PAPER BOOK THE DETAILS OF CONTRACT RECEIPTS AND PROFIT & LOSS ACCO UNT. HE ALSO REITERATED THAT NO INCOME IS EARNED BY THE JV AND THE INCOME H AS ARISEN TO THE MEMBERS INDIVIDUALLY. IN THESE CIRCUMSTANCES, WE RE STORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO VERIFY WHETHER THE CORRESPONDING INCOMES AS PER THE ALLOTMENT OF JV AGREEMENTS HAS BEEN OFFE RED IN THE INDIVIDUAL 9 ITA NOS. 1556/HYD/2010 & 1517/HYD/11 M/S PCL STICCO JV & PCL MVR JV 9 (CONSTITUENTS) HANDS AND, IF SO, IT CANNOT BE TAXE D IN THE HANDS OF THE JV, NAMELY, THE ASSESSEE. HENCE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. 21. TO SUM UP, APPEAL OF THE REVENUE AND THE APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJ AYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 21 ST SEPTEMBER, 2012 KV COPY TO:- 1) PCL-STICCO JOINT VENTURE, 65A, GROUND FLOOR, R.R. T OWERS, ABIDS, HYDERABAD. 2) M/S PCL-MVR JOINT VENTURE, HYDERABAD 3) DCIT, CIRCLE 16(3), HYDERABAD 4) THE CIT (A)-V, HYDERABAD 5) THE CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYD ERABAD S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER