The ACIT, 1(1), Bhopal v. M/s. Sahara States, Bhopal

ITA 399/IND/2008 | 2005-2006
Pronouncement Date: 15-04-2010 | Result: Dismissed

Appeal Details

RSA Number 39922714 RSA 2008
Bench Indore
Appeal Number ITA 399/IND/2008
Duration Of Justice 1 year(s) 7 month(s) 18 day(s)
Appellant The ACIT, 1(1), Bhopal
Respondent M/s. Sahara States, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 15-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 15-04-2010
Date Of Final Hearing 13-04-2010
Next Hearing Date 13-04-2010
Assessment Year 2005-2006
Appeal Filed On 28-08-2008
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO. 399/IND/08 A.YS. 2005-06 ASSTT. COMMISSIONER OF INCOME TAX 1(1) BHOPAL APPELLANT VS SAHARA STATES BHOPAL PAN AABAS-9296-C RESPONDENT APPELLANT BY : SHRI K.K. SINGH CIT DR RESPONDENT BY : SHRI PRAKASH JAIN CA O R D E R PER JOGINDER SINGH JM THIS APPEAL IS BY THE ASSESSEES AGAINST THE ORDER O F THE LEARNED CIT(A) DATED 6.6.2008 ON THE GROUND THAT THE LEARNE D LD. FIRST APPELLATE AUTHORITY WAS NOT JUSTIFIED IN DELETING THE ADDITIO N OF RS.70 37 660/- MADE BY THE AO IN VIEW OF PROVISIONS CONTAINED U/S 40(A)(IA) OF THE INCOME TAX ACT ON ACCOUNT OF PAYMENTS MADE WITHOUT DEDUCTION OF TAX AT SOURCE. 2 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHR I K.K.SINGH LEARNED CIT DR AND SHRI PRAKASH JAIN LD. COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS T HAT IT IS A CASE OF JOINT VENTURE CONSISTING OF FOUR PARTNERS AND THE B ANK ACCOUNT WAS NOT PRODUCED BY THE JOINT VENTURE. THE ASSESSMENT ORD ER WAS STRONGLY SUPPORTED. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE STRONGLY DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT THE AOP COMPRISES OF SAHARA INDIA COMMERCIAL CORPORATION LIMITED SAHARA INDIA FINANCIAL CORPORATION LIMITED SAHARA INDIA INTERNATIONAL COR PORATION LIMITED AND SAHARA AIRLINES LIMITED HAVING THEIR FIXED PERCENT AGE IN THE JOINT VENTURE. IT WAS EXPLAINED THAT THE ACTIVITIES OF TH E JOINT VENTURE WERE UNDERTAKEN BY ONE OF THE MEMBERS I.E. SAHARA INDIA COMMERCIAL CORPORATION LIMITED AND DEDUCTED THE TDS. THE IMPU GNED ORDER WAS STRONGLY DEFENDED. 3. WE HAVE CONSIDERED THE ARGUMENTS PUT FORTH BY TH E LEARNED RESPECTIVE COUNSELS AND ALSO CONSIDERED THE MATERIA L AVAILABLE ON THE FILE. BRIEF FACTS ARE THAT THE ASSESSEE IS A JOINT VENTURE AOP CARRYING ON THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF HOU SING PROJECTS UNDER THE NAME AND STYLE OF SAHARA STATES BHOPAL AND DE CLARED INCOME OF RS.14 20 400/- THE ASSESSMENT ON WHICH WAS COMPLETE D AT RS.84 58 060/- THEREBY MAKING AN ADDITION OF RS.70 37 660/- U/S 40(A)(IA) OF THE ACT. 3 ON APPEAL THE LD. FIRST APPELLATE AUTHORITY DELETE D THE IMPUGNED ADDITION BY CONTENDING THAT THE APPELLANT AOP IS N OT AN ARTIFICIAL JURISTIC PERSON BUT ONLY A PERSON WITHIN THE MEANING OF SECT ION 2(31) OF THE ACT AND SINCE ONE OF THE PERSONS OUT OF THE JOINT VENTU RE WHO WAS JOINTLY INTERESTED WITH THE DEDUCTION OF TAX AT SOURCE ACT UALLY DEDUCTED TAX AND MADE THE ENTRY IN THE BOOKS OF AOP ACCORDINGLY THE REFORE THERE REMAINS NO LIABILITY UPON THE AOP TO DEDUCT THE SAM E AGAIN. AGAINST THIS FINDING OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THE REVENUE IS IN APPEAL BEFORE US. IF THE TOTALITY OF FACTS AND THE ARGUMENTS ADVANCE D BY THE LEARNED RESPECTIVE COUNSEL ARE ANALYSED IN THE LIGHT OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT THERE IS NO DISPUTE TO THE FA CT THAT SAHARA INDIA COMMERCIAL CORPORATION LIMITED IS HAVING 85% SHARES AND THE REMAINING SAHARA INDIA FINANCIAL CORPORATION LIMIT ED SAHARA INDIA INTERNATIONAL CORPORATION LIMITED AND SAHARA AIRLI NES LIMITED ARE HAVING ONLY 7.50% 3.75% AND 3.75% SHARES RESPECTIV ELY. THIS FACT WAS ALSO NOT CONTROVERTED THAT THE JOINT VENTURE ENTRUS TED SAHARA INDIA COMMERCIAL CORPORATION LIMITED TO DEDUCT TAX ON BEH ALF OF JOINT VENTURE AND ADMITTEDLY TDS WAS DEDUCTED AND DEPOSITED WITH THE STATE EXCHEQUER THEREFORE THERE IS NO LOSS TO THE REVEN UE. EVEN OTHERWISE THE SAID DEDUCTION CANNOT BE MADE TWICE. SECTION 40 (A)(IA) OF THE ACT IS REPRODUCED HEREUNDER :- 4 40. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTIONS 30 TO 67 [ 38 ] THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN C OMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND G AINS OF BUSINESS OR PROFESSION 68 (A) IN THE CASE OF ANY ASSESSEE (IA) ANY INTEREST COMMISSION OR BROKERAGE 70 [RENT ROYALTY ] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICA L SERVICES PAYABLE TO A RESIDENT OR AMOUNTS PAYABLE TO A CONT RACTOR OR SUB- CONTRACTOR BEING RESIDENT FOR CARRYING OUT ANY WO RK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) ON WHI CH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION 71 [HAS NOT BEEN PAID 4. IF SUB-CLAUSE (IA) OF SECTION 40(I) THE ACT IS A NALYSED WITH THE FACTS OF THE PRESENT APPEAL WE HAVE FOUND THAT THE REQUI RED TAX HAS ALREADY BEEN DEDUCTED AND AFTER DEDUCTION HAS BEEN PAID/DE POSITED IN THE STATE EXCHEQUER. AS SUCH AFORESAID PROVISIONS ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE. THE RATIO LAID DOWN BY HONBL E RAJASTHAN HIGH COURT IN ADDITIONAL CIT V. FARASOL LIMITED (1987) 1 63 ITR 364 (RAJ) AND THE CASES ALREADY RELIED UPON IN THE IMPUGNED ORDER SUPPORT OUR VIEW. THE HONBLE KERALA HIGH COURT IN CIT V. C. KARUNAKA RAN AND OTHERS (170 ITR 426) OBSERVED AS UNDER :- WHEREVER INDIVIDUALS EMPLOY THEIR ASSETS IN A JOINT ENTERPRISE WITH A VIEW TO PROFIT THOUGH N OT AS PARTNERS THEY CONSTITUTE AN ASSOCIATION OF PERSON S BY REASON OF THEIR COMMON PURPOSE OR COMMON ACTION . IN SUCH AN ENTERPRISES THE DISTINCTION BETWEEN A F IRM AND AN ASSOCIATION OF PERSON MAY OFTEN BE THIN AND SOMETIMES VERY OBSCURE. IN THE PRESENT APPEAL SINCE ONE OF THE MAJOR CO-SH ARER DEDUCTED THE TAX AND DEPOSITED WITH THE GOVERNMENT THEREFORE THERE IS NO LOSS TO THE REVENUE. 2IN VIEW OF THESE FACTS AND JUDICIAL PRON OUNCEMENTS WE FIND 5 NO INFIRMITY IN THE ORDER OF THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) THEREFORE THE SAME IS UPHELD. RESULTANTLY THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 15 TH APRIL 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER APRIL 15 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/