| COURT: | Bombay High Court |
| CORAM: | A. P. Bhangale J, B. P. Dharmadhikari J |
| SECTION(S): | 3 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | AOP, Joint Venture |
| COUNSEL: | N. S. Bhattad |
| DATE: | March 2, 2015 (Date of pronouncement) |
| DATE: | March 9, 2015 (Date of publication) |
| AY: | - |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| Even if contract is awarded to the Joint Venture, the income is assessable only in the hands of the person which has executed the work | |
The High Court had to consider whether the entire income earned by the joint venture company is liable to be taxed in the hand 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. It also had to consider the impact of C.H. Acthaiya 218 ITR 239 (SC) and Murugesa Naicker Mansion 244 ITR 461 (SC) wherein it was held that AO is not precluded from taxing the right person merely on the ground that a wrong person is taxable. HELD by the High Court dismissing the appeal:
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 Limited. It is also found that the receipts for the said project work are reflected in the books of account of SMS Infrastructure Limited and in return, said SMS Infrastructure Limited 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, some income could not have been taxed again in the hands of joint venture/assessee.
I DO NOT UNDERSTAND WHY REVENUE DOES NOT UPDATE THEIR TAX MANUALS TO GUIDE THEIR VERY ‘INTELLIGENT OFFICERS’ INTERPRETATION OF STATUTE’.
UNNECESSARILY THE REVENUE MAKES UNNECESSARY APPEALS and waste the hon high court’ time after all much more important cases need to be attended by the hon high courts.
if proper manuals are made by seasoned tax advocates probably the manual could of referred the SC judgements which hon court referred in their decisions.
you may be any government but shd know how to do sensible governance.Else none can trust the prudence of governments, as they waste unnecessarily tax payers moneys as also that of assesses.
if there is some sensible governance in revenue, we can say revenue need to collect taxes certainly nor imprudently.
i hope soon hon SC would pull up these great revenue department, so also the finance ministry. if done country go on improving its economy,i believe.
Intelligent officers will get automated updation. But they are very few. They are not encouraged by the super bosses. They even try to invoke disciplinary actions against such updated officers because they act with accurate decision which will not be palatable to the bosses.