B. T. Patil & Mahalakshmi Joint Venture., Belgaum V. Income Tax Officer, Ward-2(2), Belgaum, Belgaum

ITA 167/PAN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1419 (ITAT-PANAJI)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-08-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 22-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR SUNDARESAN S LD
• Assessee Lawyers: ULHAS KINI
• Keywords: Opportunity of being heard; Advance ruling

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NOS. 166 & 167/PNJ/2015 : (A.YS 2010 - 11 & 2011 - 12 ) B.T. PATIL & MAHALAKSHMI JOINT VENTURE, 4112, PATSON HOUSE, P.B. ROAD, BELGAUM 590 003, KARNATAKA (APPELLANT) PAN : AAAAB4785E VS. INCOME TAX OFFICER WARD - 2(2), BELGAUM (RESPONDENT) ASSESSEE BY : ULHAS KINI, CA REVENUE BY : DR. SUNDARESAN S., LD. DR DATE OF HEARING : 25/08/2015 DATE OF PRONOUNCEMENT : 25/08/2015 O R D E R PER GEORGE MATHAN : 1. ITA NO. 166/PNJ/2015 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), BELAGAVI IN ITA NO. 03/BGM/2013 - 14 DT. 4.2.2015 FOR THE A.Y 2010 - 11 AND ITA NO. 16 7 /PNJ/2015 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), BELAGAVI IN ITA NO. 187/BGM/2013 - 14 DT. 4.2.2015 FOR THE A.Y 2011 - 12 . 2. AS THE ISSUES RAISED IN BOTH THE APPEALS ARE IDENTICAL, THEY ARE BEING DISPOSED OFF BY THIS COMMON ORDER. SHRI ULHAS KINI, CA REPRESENTED ON BEHALF 2 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) OF THE ASSESSEE AND DR. SUNDARESAN S., LD. DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEALS, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. ON FACTS & IN LAW LD. CIT(A), BELGAUM ERRED BY CONFIRMING THE LEVY OF TAX IN THE HANDS OF THE JOINT VENTURE WITHOUT PROPERLY APPRECIATING THE FACT THAT THE JOINT VENTURE[JV] DID NOT EXECUTE ANY WORK AND IN TURN THE JOINT VENTURE MEMBERS HAVE SHARED THE WORK IN THE PROPORTION O F 51% TO 49% AND EXECUTED INDEPENDENTLY INCURRING EXPENSES ATTRIBUTABLE TO THEIR SHARE OF WORK IN THEIR RESPECTIVE BOOKS OF ACCOUNTS BEARING THEIR OWN LOSS AND RETAINING THEIR PROFIT AND BY MAKING THE OWN INVESTMENT IN THEIR SHARE OF WORK. 2. LD CIT(A) OUGHT TO HAVE APPRECIATED TERMS & CONDITIONS SPECIFIED IN POST BID MOU WHICH SPECIFIES THE INTENT & OBJECT OF ASSESSEE - JV AND ALSO THE WORK EXECUTION BILLS RAISED BY THE JOINT VENTURE MEMBERS INDEPENDENTLY IN RESPECT OF THEIR SHARE OF WORK EXECUTION. 3. L D. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE JV MEMBERS WHO SHARED & EXECUTED THE WORK INDEPENDENTLY INCURRING EXPENDITURE OF THEIR SHARE OF WORK HAVE OFFERED THEIR RESPECTIVE INCOME TO TAX IN THEIR RESPECTIVE RETURN OF INCOME FILED WITH AND ASSESSED B Y THE ASSESSING OFFICERS AT KO L HAPUR UNDER THE JURISDICTION OF CCIT PUNE AND THEREFORE LEVYING TAX AGAIN ON ASSESSEE - JV RESULTS INT O TAXING OF SAME INCOME TWICE. 4. LD. CIT(A) FAILED TO FOLLOW THE PROPOSITION LAID DOWN BY FOLLOWING AAR & ITAT PUNE BENCH I N INTERPRETING PROVISIONS OF SECTION 2(31)(V) TO LEVY THE TAX ON AN AOP THAT THEIR NEEDS TO BE A JOINT ACTION & JOINT EXECUTION OF WORK BY AOP MEMBERS WHETHER OR NOT THERE WAS ANY INTENTION OF EARNING PROFIT. 4. IT WAS SUBMITTED BY THE LD. AR THAT THE AS SESSEE IS A JOINT VENTURE BETWEEN M/S. B.T. PATIL & BELGAUM (CONSTRUCTION) PVT. LTD. AND MAHALAXMI CONSTRUCTION CORPORATION LTD. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD ENTERED INTO A PRE - BID AGREEMENT DT. 26.3.2004 WHICH IS SHOWN AT PAGES 8 - 12 OF 3 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) THE PAPER BOOK FOR THE PURPOSE OF BIDDING FOR EXCAVATION AND CONSTRUCTION OF SHAFTS AND TUNNELS OF KOYNA LEFT BANK DAM FOOT POWER HOUSE. AFTER BEING AWARDED THE CONTRACT BY THE GOVERNMENT OF MAHARASHTRA, THE TWO MEMBERS TO THE AGREEMENT ENTERED INTO A POST - B ID MOU DT. 31.3.2005 WHICH IS SHOWN AT PAGES 13 - 16 OF THE PAPER BOOK. HERE, IT SHOULD BE MENTIONED THAT BOTH THE AGREEMENTS SPECIFICALLY QUALIFY THAT THE WORK AWARDED TO THE JOINT VENTURE SHALL BE SHARED AND EXECUTED BY THE MEMBERS IN THE PROPORTION B.T. PATIL 51% AND MAHALAXMI CONSTRUCTION CORPORATION LTD. 49%. THE MAIN DIFFERENCE BETWEEN THE TWO AGREEMENTS, IT IS NOTICED, IS THAT IN THE PRE - TENDER AGREEMENT DT. 26.3.2004 THE MEMBERS TO THE JOINT VENTURE SPECIFIED THAT THEY SHALL SHARE AND PARTICIPAT E IN THE SPECIFIED PERCENTAGE WHEREAS IN THE POST - BID MOU DT. 31.3.2005 THEY SPECIFIED THAT IT SHALL BE EXECUTED BY THE MEMBERS INDEPENDENTLY IN THE PERCENTAGE SPECIFIED. IT WAS THE FURTHER SUBMISSION BY THE LD. AR THAT THE TURNOVER IN RESPECT OF THE TEND ER WORK WITH THE GOVERNMENT WAS RECEIVED BY THE JOINT VENTURE (THE ASSESSEE HEREIN) AND WAS SHARED BY THE TWO MEMBERS INDEPENDENTLY. ON A SPECIFIC QUERY FROM THE BENCH, IT WAS SUBMITTED BY THE LD. AR THAT THE INDIVIDUAL MEMBERS TO THE JOINT VENTURE RAISED THE BILLS ON THE JOINT VENTURE AND THE JOINT VENTURE RAISED THE CONSOLIDATED BILLS ON THE GOVERNMENT. IT WAS THE SUBMISSION BY THE LD. AR THAT THE POST - BID MOU, SPECIFICALLY CLAUSE NO. 6 THEREOF, HAS SPECIFIED THAT UNDER NO CIRCUMSTANCES THE JOINT VENTUR E CONSTITUTED A PARTNERSHIP BETWEEN THE MEMBERS. IT WAS THE SUBMISSION THAT THE PROFITS IN RESPECT OF THE WORK DONE BY EACH OF THE MEMBERS WAS REFLECTED IN THE BOOKS OF ACCOUNTS OF THE RESPECTIVE MEMBERS AND OFFERED TO TAX. THE SAME WAS ALSO ACCEPTED BY THE DEPARTMENT. THE LD. AR FURTHER SUBMITTED THAT THE MEMBERS HAVE ALSO CLAIMED DEDUCTION U/S 80IA IN RESPECT OF THE SAID PROFITS. IT WAS THE SUBMISSION THAT THE SAID CLAIM HA S ALSO BEEN ALLOWED BY THE AO. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSEE - JOINT VENTURE FILED ITS RETURN OF INCOME ONLY FOR THE PURPOSE OF CLAIMING THE TDS. IT WAS THE SUBMISSION THAT THE 4 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA MOTOR SERVICE AND CANARA PUBLIC CONVEYANCES REPORTED IN [1993] 70 TAX MAN 563 (KAR) WAS SQUARELY APPLICABLE INSOFAR AS IT HAS BEEN HELD THAT WHEN TWO COMPANIES ENTERED INTO AN AGREEMENT TO SHARE THE PROFIT EARNED BY RUNNING BUSES ON A PARTICULAR ROUTE, THE INCOME ARISING FROM THIS VENTURE WAS MADE ON EACH OF THE COMPANIES SE PARATELY, SUBSEQUENTLY THE SAME INCOME CANNOT BE ASSESSED BY TREATING THEM AS MEMBERS OF AOP. IT WAS THE FURTHER SUBMISSION THAT THE JOINT VENTURE IS NOT MAINTAINING SEPARATE DETAILED BOOKS OF ACCOUNTS AND THE RECEIPTS OF THE JOINT VENTURE THROUGH BANK ACC OUNT ARE INCORPORATED IN THE BASIC BOOKS AND TRANSFERRED TO THE MEMBERS OF THE JOINT VENTURE. ON A SPECIFIC QUERY FROM THE BENCH, THE LD. AR SUBMITTED THAT ALL THE BILLS INCLUDING SALES TAX ARE BILLED BY THE JOINT VENTURE BUT SEPARATELY ACCOUNTED IN THE APPROPRIATE SHARE BY THE MEMBERS OF THE JOINT VENTURE. ON A SPECIFIC QUERY BY THE BENCH AS TO WHY DETAILED BOOKS OF ACCOUNTS ARE NOT BEING MAINTAINED IN VIEW OF CLAUSE ( G ), ( K ), ( L ) AND ( M ) OF T HE PRE - BID AGREEMENT DT. 26.3.2004, THE LD. AR SUBMITTED THAT THE ASSESSEE IS NOT THE CONTRACTOR BUT WORK IS BEING DONE BY THE MEMBERS TO THE JOINT VENTURE. IT WAS THE SUBMISSION THAT THE TURNOVER IS TAKEN IN THE MEMBERS BOOKS OF ACCOUNTS AND THE EXPENDIT URE IS ALSO CLAIMED THEREIN IN RESPECT OF THE WORK EXECUTED BY THE MEMBERS INDEPENDENTLY. IT WAS THE SUBMISSION THAT THE AO HAD HELD THAT ALL THE WORK WAS GIVEN TO THE JOINT VENTURE AND CONSEQUENTLY THE JOINT VENTURE IS RESPONSIBLE AND AS THE JOINT VENTUR E IS RESPONSIBLE AND TDS HAS BEEN MADE ON THE JOINT VENTURE, THE INCOME IN RELATION TO THE TDS MUST ALSO FOLLOW THE TDS I.E. IN THE HANDS OF THE JOINT VENTURE. IT WAS THE SUBMISSION THAT THE AO HAD APPLIED THE PROVISIONS OF SEC. 199 OF THE ACT. IT WAS TH E FURTHER SUBMISSION THAT THOUGH THE JOINT VENTURE HAS PAN NUMBER AND SALES TAX REGISTRATION, STILL IT WAS NOT A SEPARATE ENTITY FOR THE PURPOSE OF TAXABILITY INSOFAR NO WORK HAS BEEN DONE BY THE JOINT VENTURE BUT IT HAS BEEN DONE BY THE MEMBERS OF THE JOI NT VENTURE. HE PLACED RELIANCE UPON THE DECISION OF THE PUNE 5 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) BENCH OF THE ITAT IN THE CASE OF GAMMON PROGRESSIVE JOINT VENTURE IN ITA NO. 2117/PN/2012 DT. 31.10.2013 WHEREIN THE TRIBUNAL HAS REFERRED TO THE DECISION OF ANOTHER DECISION OF THE PUNE BENCH I N THE CASE OF RAJDEEP & PMCC INFRASTRUCTURE WHEREIN IT HAS BEEN HELD AS FOLLOWS : 6. WE HAVE NOTED THAT IT IS AN ADMITTED POSITION THAT NO WORK IS CARRIED OUT BY THE AOP, IT HAS ACTED AS A CONDUIT BETWEEN THE MSRDC AND THE TWO PERSONS CONSTITUTING THIS A OP SO FAR AS THEIR SEPARATE, AND NEATLY IDENTIFIED, WORK AREAS ARE CONCERNED. A MERE EXISTENCE OF AN AOP CANNOT LEAD TO TAXABILITY IN THE HANDS OF THE AOP UNLESS THE AOP RECEIVES MONIES IN ITS OWN RIGHT. WE HAVE NOTED THAT HONBLE AUTHORITY OF ADVANCE RULI NGS WAS IN SEISIN OF A MATERIALLY IDENTICAL SITUATION IN THE CASE OF VAN OORD ACZ BV IN RE (248 ITR 399) IN WHICH TWO CONTRACTORS JOINED HANDS FOR CARRYING OUT NEATLY IDENTIFIED SEPARATE WORK WHICH WAS A PART OF COMPOSITE CONTRACT AWARDED TO THE AOP, BUT T HE TAXABILITY OF INCOME FROM SUCH CONTRACT WAS HELD TO BE TAXABLE IN THE HANDS OF THE RESPECTIVE CONTRACTORS. WHILE HOLDING SO HONBLE AUTHORITY FOR ADVANCE RULING OBSERVED AS FOLLOWS: 7. SO FAR AS QUESTION NOS. 1 AND 2 ARE CONCERNED THE PARTIES HAVE SP ECIFICALLY RULED OUT CONSTITUTION OF ANY PARTNERSHIP BETWEEN THEM. THERE IS NO SHARING OF PROFITS OR LOSS. THEY HAVE SPECIFICALLY PROVIDED IN THE AGREEMENT THAT EACH PARTY WILL BEAR ITS OWN LOSS AND RETAIN ITS PROFITS AS AND WHEN SUCH PROFITS OR LOSS ARISE . HAVING REGARD TO THE AGREEMENT WE ARE OF THE VIEW THAT THE APPLICANT CANNOT BE TREATED AS A PARTNERSHIP WHICH CAN ONLY BE CREATED BY AN AGREEMENT. NOR CAN IT BE TREATED AS AN AOP. IN ORDER TO CONSTITUTE AN AOP THERE WILL HAVE TO BE COMMON PURPOSE OR COMM ON ACTION AND THE OBJECT OF THE ASSOCIATION MUST BE TO PRODUCE INCOME JOINTLY. IT IS NOT ENOUGH THAT THE PERSONS RECEIVE THE INCOME JOINTLY. THE LD. AR ALSO RELIED UPON THE DECISION OF PUNE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRADDHA & MAHALAXMI JOINT VENTURE IN ITA NO. 942/PN/2013 DT. 28.11.2014 WHEREIN THE DECISION OF GAMMON PROGRESSIVE JOINT VENTURE HAS BEEN FOLLOWED. THE LD. AR ALSO RELIED UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ORIENTAL STRUCTURAL ENGINEERS (P.) LTD. REPO RTED IN 6 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) [2015] 58 TAXMANN.COM 77 (DELHI) WHEREIN IT HAS BEEN HELD THAT T HE MERE CO - OPERATION OF ONE PERSON WITH ANOTHER IN SERVING ONES BUSINESS OBJECTIVE WOULD NOT BE SUFFICIENT TO CONSTITUTE AN A SSOCIATION OF PERSONS MERELY BECAUSE THE BUSINESS INTERESTS ARE COMMON . IT WAS THUS THE SUBMISSION THAT THE ASSESSMENT MADE BY THE AO ON THE ASSESSEE WAS LIABLE TO BE CANCELLED INSOFAR NO INCOME WAS LIABLE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE AND THE ASSESSEE WAS ENTITLED TO CLAIM REFUND OF THE T DS. 5. IN REPLY, THE LD. DR DREW OUR ATTENTION TO CLAUSE ( B ) OF THE PRE - BID MOU TO SUBMIT THAT AS PER THE SAID CLAUSE THE MEMBERS TO THE JOINT VENTURE HAD AGREED TO FORM THE JOINT VENTURE FOR THE PURPOSE OF SUBMITTING THE P RE - Q UALIFICATION A PPLICATION D OCUMENT INITIALLY AND THEN TENDER TO THE EMPLOYER AND IF SUCCESSFUL, FOR THE EXECUTION OF THE WORKS AS AN INTEGRATED JOINT VENTURE. IT WAS THE SUBMISSION THAT THE INTENTION OF THE JOINT VENTURE ITSELF WAS ONE OF AN INTEGRATED JOINT VENTURE AND NOT ONE WHE RE THE TWO MEMBERS WORK INDEPENDENTLY OF EACH OTHER. IT WAS THE SUBMISSION THAT THE JOINT VENTURE HAD RAISED THE BILLS, THE RECEIPTS ARE RECEIVED BY THE JOINT VENTURE AND THE RIGHT TO THE RECEIPT OF THE BILLS ARE WITH THE JOINT VENTURE. THE TWO MEMBERS T O THE JOINT VENTURE ARE IN THEIR INDEPENDENT STATUS HAVING NO CONNECTION WITH THE JOINT VENTURE. IT WAS THE SUBMISSION THAT AS THE ASSESSEE HAD NOT SHOWN ANY EXPENDITURE, THE ONLY OPTION AVAILABLE TO THE AO WAS TO ASSESS THE INCOME AS PER THE TDS DEDUCTED . IT WAS THE SUBMISSION THAT THE ORDER OF THE AO WAS LIABLE TO BE SUSTAINED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET, A PERUSAL OF PRE - BID MOU ENTERED INTO BY THE TWO MEMBERS OF THE ASSESSEE - JOINT VENTURE DT. 26.3.2004 CLEARLY SHOWS T HAT THE INTENTION OF THE TWO MEMBERS IN FORMING THE JOINT VENTURE WAS TO BID FOR A PARTICULAR WORK WITH THE GOVERNMENT OF 7 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) MAHARASHTRA. A PERUSAL OF THE POST - BID MOU DT. 31.3.2005, MORE SPECIFICALLY THE DRAWING UP OF THE PROPOSED WORK SHARING BETWEEN B.T. PATIL & MAHALAXMI INFRAPROJECTS LTD. AT PAGE 17 OF THE PAPER BOOK CLEARLY SHOWS THAT THOUGH THERE IS DEMARCATION OF WORK AREA, THE WORK IS ONE CONSOLIDATED PROJECT ONLY. THE DETAILS OF THE PROJECT ALSO, WHICH IS SEEN FROM THE TENDER DOCUMENTS FOUND AT PAG E 3 - 7 OF THE PAPER BOOK, CLEARLY SHOW THAT IT IS A SINGLE PROJECT AND SAME CANNOT BE BIFURCATED. F URTHER , A PERUSAL OF THE POST - BID MOU DT. 31.3.2005 , CLAUSE (5) THEREOF SPECIFICALLY PROVIDES THAT THAT EVEN THOUGH THE MEMBERS OF JOINT VENTURE ARE JOINTLY SEVERALLY LIABLE TO THE PROJECT AUTHORITIES IN RESPECT OF WORKS AWARDED TO THE JOINT VENTURE, UNDER THIS MOU, THE LIABILITY OF INDIVIDUAL MEMBER IS RESTRICTED TO THE SHARE OF WORK EXECUTED BY THE JOINT VENTURE MEMBER . THIS IS IN COMPLETE DIVERSION FROM THE PRE - BID MOU WHEREIN CLAUSE (G) SPECIFIES THAT THE JOINT VENTURE SHALL NOT BE DISSOLVED TILL THE COMPLETION OF THE DEFECT LIABILITIES PERIOD AS STIPULATED IN TENDER DOCUMENT CONDITIONS OF THE WORKS AND TILL ALL THE LIABILITIES THEREOF ARE LIQUIDATED. FURTHER, CLAUSE (I) SPECIFIED THAT NO PARTNER HAS A RIGHT TO ASSIGN ANY BENEFIT, OBLIGATION OR LIABILITY UNDER THE AGREEMENT TO ANY THIRD PARTY WITHOUT FIRST OBTAINING THE WRITTEN CONSENT OF THE OTHER PARTNER. THUS, WHAT BECOMES EVIDENT IS THAT FOR THE PURPOSE OF PARTICIPATING IN THE TENDER, THE ASSESSEE ENTERED INTO ONEMOU TERMED AS PRE - BID MOU. AFTER THE TENDER WAS OBTAINED, THE ASSESSEE DECIDES TO RE - ARRANGE ITS AFFAIRS BY ENTERING INTO THIS SO - CALLED POST - BID MOU. IT IS NOT CLEAR WHETHER THIS POST - BID MOU WAS EVEN BEFORE THE AUTHORITIES FROM WHOM THE TENDER HAS BEEN OBTAINED. THIS BEING THE FACTS, A PERUSAL OF THE DECISION OF THE HON'BLE DELHI HIGH COURT REFERRED TO BY THE LD. AR IN THE CASE OF ORIENTAL STRUCTURAL ENGINEERS (P.) LTD. REFERRED TO SUPRA CLEARLY SPECIFIES THAT COMMON ENTERPRISE WHICH IS MANAGED THROUGH SOME DEGREE OF JOINT PARTICIPATION IS AN ESSENTIAL CONDITION FOR CONSTITUTING AN ASSOCIATION OF PERSON. A PERUSAL OF THE PRE - BID MOU SPECIFICALLY PROVIDES THAT THE SITE MANAGEMENT IS TO BE MANAGED 8 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) BY A PROJECT MANAGER REPORTING TO THE APEX COORDINATING BODY AND THE SAID PROJECT MANAGER SHALL BE AUTHORISED TO REPRESENT THE JOINT VENTURE ON SITE IN RESPECT OF MATTERS ARISING OUT OF THE CONTRACT. EVEN THE POST - BID MOU IN CLAUSE (7) SP ECIFIES THAT T HE APEX CO - ORDINATING BODY (ACB) HAVING REPRESENTATIVES OF BOTH THE J.V MEMBERS SHALL HAVE THE POWER TO CONTROL & MANAGE THE AFFAIRS OF THE J.V FOR PROPER CO - ORDINATION OF WORK EXECUTED BY THEM IN AFORESAID PROPORTION. THUS CLEARLY THIS JO INT VENTURE IS BEING MANAGED THROUGH JOINT PARTICIPATION AND IN VIEW OF THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ORIENTAL STRUCTURAL ENGINEERS (P.) LTD. REFERRED TO SUPRA , THE JOINT VENTURE IS LIABLE TO BE TREATED AS AN ASSOCIATION OF PE RSONS AND ASSESSED AS SUCH. THUS, THE ACTION OF THE AO IN ASSESSING THE JOINT VENTURE AS AN ASSOCIATION OF PERSONS STANDS UPHELD. 7. A PERUSAL OF THE POST - BID MOU FURTHER SHOWS THAT THERE IS AN UNDERTAKING BETWEEN THE MEMBERS OF THE JOINT VENTURE IN CLAUSE (11) THAT THE MEMBERS SHALL BE RESPONSIBLE TO MAINTAIN OR CAUSE TO MAINTAIN PROPER BOOKS OF ACCOUNTS IN RESPECT OF BUSINESS IN THE J.V AND SAME SHALL BE CLOSED AT THE END OF EVERY FINANCIAL YEAR . WE ARE SURE THAT THE ASSESSEE MUST BE MAINTAINING SOME BOOKS OF ACCOUNTS FROM WHICH THE PROFITS WOULD BE DISCERNABLE. HERE, WHAT FURTHER COMES TO OUR MIND IS , IF THE ASSESSEE IS BEING TREATED AS A JOINT VENTURE A ND AS AN ASSOCIATION OF PERSONS, THEN, THE APPORTIONMENT OF THE WORK BETWEEN THE MEMBERS OF T HE JOINT VENTURE WOULD BECOME A SUB - CONTRACT. IN ANY CASE, THIS HAS NOT BEEN LOOKED INTO BY THE AO. IN T HE DECISION RELIED UPON BY THE LD. AR IN THE CASE OF SHRADDHA & MAHALAXMI JOINT VENTURE REFERRED TO SUPRA IT IS ALSO EXPLAINED THAT THE TDS WAS CREDIT ED TO THE MEMBERS ON THE BASIS OF TAX APPORTIONMENT CERTIFICATE AND THEY HAVE ACCOUNTED THE CORRESPONDING CON T RACT REVENUE IN THEIR RESPECTIVE RETURNS BUT IN THE PRESENT CASE, THE ASSESSEE HAS NOT BEEN ABLE TO SHOW US ANY SUCH APPORTIONMENT CERTIFICATES. A PERUSAL OF THE 9 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) ASSESSMENT ORDER IN THE PRESENT CASE SHOWS THAT THE AO HAS ESTIMATED THE INCOME OF THE ASSESSEE AT 8% OF THE CONTRACT RECEIPTS. HE HAS ARRIVED AT THE TURNOVER FROM THE CONTRACT RECEIPTS . THIS IS NOT PERMISSIBLE. FURTHER, THE ASSESSEE IN HIS GROUNDS OF APPEAL HAS ALSO RAISED THE GROUND THAT THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION U/S 80IA OF THE ACT. THIS HAS ALSO NOT BEEN CONSIDERED BY THE AO. BEFORE THE LD. CIT(A) THE ASSESSEE HAS SPECIFICALLY CONTENDED THAT THE ASSESSEE IS NOT A CONTRACTOR BUT DEVELOPER OF INFRASTRUCTURE FACILITY AS ENVISAGED U/S 80IA(4)(I) OF THE ACT. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSMENT NEEDS TO BE RE - DONE BY THE AO AFTER GRANTING THE ASSESSEE OPPORTUNITY OF BEING HEARD. THE ASSESSEE WOULD BE AT LIBERTY TO MAKE ALL CLAIMS, EVEN IN RESPECT OF THE CLAIM OF DEDUCTION U/S 80IA AND THE AO SHALL CONSIDER THE ISSUES AFRESH. IN THE RESULT, THE ASSESSMENT ORDERS PASSED BY THE AO ARE SET ASIDE IN ITS ENTIRETY IN RESPECT OF THE QUANTUM OF ASSESS MENT AND ALL ISSUES ARE LEFT OPEN BEFORE THE AO. 8 IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT ON 25/08/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 25/08/ 201 5 *SSL* 10 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 11 ITA NOS. 166 & 167/PNJ/2015 (A.YS : 2010 - 11 & 2011 - 12) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 25/08/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 25/08/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 25/08/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 25/08/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 25/08/2015 SR.PS 6. DATE OF PRONOUNCEMENT 25/08/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 25/08/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER