THE COMMISSIONER OF INCOME TAX vs. M/S KISHORI LAL LOOMBA @ SONS

ITA-109-2012 (THE COMMISSIONER OF INCOME TAX Vs M/S KISHORI LAL LOOMBA @ SONS) 13-05-2015 HIGH COURT OF MADHYA PRADESH : JABALPUR INCOME TAX APPEAL NO. 109 OF 2012 The Commissioner of Appellant Income Tax, Jabalpur versus M/s Kishori Lal Loomba & Sons Respondent Present : Hon'ble Shri Justice Rajendra Menon Hon'ble Shri Justice M. C. Garg ................................................................................................. Shri Sanjay Lal, counsel for the appellant. Shri Ganesh Purohit, Sr. Counsel with Shri Abhishek Oswal for the respondent. ................................................................................................. .. J U D G M E N T (13/05/15) This is revenue's appeal under Section 260-A of the Income Tax Act calling in question tenability of an order dated 12th March, 2012 passed by the Income Tax Appellate Tribunal, Indore Bench in I. T. A. No. 144/Jab/2009. The assessee was a civil contractor and was granted 2. certain work on contract basis. For execution of work, the assessee was not having the financial capacity and had certain difficulties, therefore, the assessee entered into the memorandum of understanding with M/s Loomba and Broca for execution of the work awarded and as per the agreement 4 % commission was to be paid for execution of work by M/s Loomba and Broca. While submitting the return for the assessment year 2. 2006-07 the assessee claimed exemption on the amount paid to M/s Loomba and Broca and by holding that the assessee had entered into a sub- contract with M/s Loomba and Broca, the same was disallowed. The learned appellate Tribunal went into the matter 3. and after taking note of the judgments of the Supreme Court came to the conclusion that the memorandum of understanding entered into between the assessee and M/s Loomba and Broca is a joint venture undertaking and, therefore, it cannot be said that the assessee entered into a sub- contract. Holding that there is no sub-contract, the provisions of Section 194C and Section 40 a (Ia) of the Income Tax Act is not applicable. The disallowance has been interfered with and it has been held that treating the relationship between the assessee and M/s Loomba and Broca to be a joint venture undertaking, the assessment has been concluded. 5. Even though, Shri Sanjay Lal tried to emphasize that the agreement entered into between the assessee and M/s Loomba and Broca is a sub- contract. 6. We have considered the submissions made and on going through the order passed by the Appellate Tribunal, it is clear that the Appellate Tribunal has meticulously dealt with the matter, the memorandum of understanding, nature of relationship, what are the ingredients necessary to constitute a joint venture undertaking and has recorded a finding that the memorandum of understanding between the assessee and M/s Loomba and Broca is a joint venture undertaking. 7. In doing so, we are of the considered view that the learned Tribunal has not committed any error in allowing the appeal of the assessee and no substantial question of law arises for consideration. 8. The appeal is therefore dismissed. (RAJENDRA MENON) JUDGE (MOOL CHAND GARG) JUDGE