Dy.CIT, Circle-14(2), Hyderabad V. M/s Hindustan Ratna (JV), Hyderabad

ITA 513/HYD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4821 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 513, 514 & 515/HYD/2013 ASSESSMENT YEARS : 2008-09, 2009-10 & 2010-11 DY. COMMISSIONER OF INCOME TAX, APPEL LANT CIRCLE 14 (2), HYDERABAD. VS. M/S HINDUSTAN RATNA JV, RESPONDENT HYDERABAD. PAN AAEFH0901P APPELLANT BY : SHRI SOLGY JOSE T. KOTTARAM RESPONDENT BY : SHRI A.V. RAGHURAM DATE OF HEARING : 06/11/2013 DATE OF PRONOUNCEMENT : 19/12/2013 ORDER PER CHANDRA POOJARI, A.M.: THESE APPEALS FILED BY REVENUE ARE DIRECT ED AGAINST SEPARATE ORDERS OF CIT(A)-II, HYDERABAD DATED 10/01/2013, FOR ASSESSMENT YEARS 2008-09, 2009-10 AND 2010-11. AS IDENTICAL IS SUE IS INVOLVED IN THESE APPEALS, THEY WERE CLUBBED AND HEARD TOGETHER AND, THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE CONVENIENCE. 2. THE GROUNDS RAISED BY THE REVENUE IN ALL THE APPEALS ARE COMMON, WHICH ARE AS UNDER: 1. THE ORDER OF CIT(A) IS ERRONEOUS BOTH IN FACTS A ND IN LAW. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS CORRECT IN MAKING A DISTINCTION BETW EEN JOINT VENTURES FORMED FOR THE PURPOSE OF OBTAINING A CONT RACT AND OTHER JOINT VENTURES ? 2 ITA NOS. 513, 514 & 515/HYD/13 M/S HINDUSTAN RATNA JV 3. WHETHER THE CIT(A) WAS CORRECT IN CONCLUDING THA T JOINT VENTURES FORMED FOR THE PURPOSE OF OBTAINING A CONT RACT HAVE NO LIABILITY TO DEDUCT TDS, ALTHOUGH THE CIT(A) ALLOWS NO SUCH EXEMPTION ? 3. WE REFER TO THE FACTS IN AY 2009-10, AS THE CIT(A) DECIDED THE APPEALS FOR AY 2008-09 AND 2010-11 FOLLOWING HIS DE CISION IN AY 2009-10. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS A JOINT VENTURE FORMED BY TWO PARTNERSHIP FIRMS NAMELY M/S HES INFRA PVT. LTD. AND M/S RATNA INFRASTRUCTURE PROJECTS PVT. LTD . IT IS FORMED FOR THE PURPOSE OF PROCURING CONTRACTS FROM GOVERNMENT AND OTHER AGENCIES ON BEHALF OF ITS CONSTITUENTS. THERE WAS A SURVEY U/S 133A ON 18/03/2010 TO VERIFY THE ADHERENCE OF TDS PROVIS IONS BY THE ASSESSEE. DURING THE SCRUTINY PROCEEDINGS, IT WAS N OTICED THAT THE ASSESSEE HAD NOT DEDUCTED THE TDS ON THE CONTRACT A MOUNTS PAID TO JOINT VENTURE CONSTITUENTS. THE ASSESSING OFFICER A CCEPTED THE CONTENTION OF THE ASSESSEE THAT THE CONSTITUENT COM PANIES (HES INFRA PVT. LTD. AND RATNA INFRASTRUCTURE PROJECTS PVT. LT D.) HAD SHOWN THE CONTRACT RECEIPTS IN THEIR BOOKS OF ACCOUNT AND THE SAME HAD BEEN OFFERED FOR TAXATION. KEEPING IN VIEW THE HONBLE S UPREME COURTS DECISION IN THE CASE OF M/S HINDUSTAN COCA COLA BEV ERAGES PVT. LTD. VS. CIT, 293 ITR 226 (SC), THE ASSESSING OFFICER HA D RAISED ONLY INTEREST ON REGULAR CONTRACT AMOUNTS OF RS. 18,47,6 17/- AND ON MOBILISATION ADVANCES AT RS. 44,161/-. 5. ON APPEAL, THE CIT(A) AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE AND FOLLOWING THE DECISIONS OF THE TRIBUNA L IN THE CASE OF UAN RAJU CONSTRUCTIONS AND MEIL-KCCPL-FLOWMORE (JV) , HELD THAT THERE IS NO LIABILITY ON THE JV TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE TO THE CONSTITUENT MEMBERS AND DIRECT ED THE ASSESSING OFFICER TO DELETE THE INTEREST CHARGED U/ S 201(1A) OF THE IT ACT. 3 ITA NOS. 513, 514 & 515/HYD/13 M/S HINDUSTAN RATNA JV 6. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD. IN ASSESSEES OWN CASE FOR AY 2009-10 VIDE ORDER DATED 18/12/2013 IN ITA NO. 372/HYD/2013, THE COORDINATE BENCH OF JURISDICTIONAL TRIBUNAL, HELD AS FOLLOWS: THERE IS NO SUB-CONTRACT BETWEEN JV AND THE CONSTIT UENTS AND SINCE THE JV HAS BEEN FORMED ONLY TO PROCURE CONTRA CT WORKS FROM THE GOVERNMENT AND THE CONTRACT IS BEING EXECU TED BY THE CONSTITUENT PARTNERS IN THEIR SHARING RATIO 60:40 A S PER THE TERMS OF PARTNERSHIP DEED, IT CANNOT BE SAID THAT THE JV IS A CONTRACTOR AND ITS CONSTITUENTS ARE SUB-CONTRACTORS . 7.1 AS SUCH, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO DELETE INTERE ST CHARGED U/S 201(1A) ON THE GROUND THAT THERE IS NO LIABILITY ON THE JV TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE TO THE CONSTITUENT MEMBERS AND ACCORDINGLY, THE ORDER OF THE CIT(A) IS HEREBY CONF IRMED. THE GROUNDS RAISED BY THE REVENUE, WHICH ARE COMMON IN ALL THE YEARS UNDER CONSIDERATION ARE DISMISSED. 8. IN THE RESULT, ALL THE THREE APPEALS UNDER CONSI DERATION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/12/2013. SD/- SD/- ( SAKTIJIT DEY ) JUDICIAL MEMBER ( CHANDRA POOJARI ) ACCOUNTANT MEMBER HYDERABAD, DATED 19 TH DECEMBER, 2013 KV 4 ITA NOS. 513, 514 & 515/HYD/13 M/S HINDUSTAN RATNA JV COPY TO:- 1)DCIT, CIRCLE 14(2), HYDERABAD. 2)M/S HINDUSTAN RATNA JV, C/O S/SHRI K. VASANTKUMAR & AV RAGHURAM, ADVOCATES, 610, 6 TH FLOOR, BABHUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 001. 3) THE CIT (A)-IV, HYDERABAD 4) THE CIT-III, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.