ITO, WARD-14(2), HYD, HYDERABAD vs. HINDUSTAN RATNA (JV), HYD, HYDERABAD

Brief facts of the case are that the assessee, an AOP and engaged in ‘contract works’, filed its return of income for the A.Y. 2011-12 electronically on 30.09.3011 admitting income of Rs. 38,96,888/-. During the proceedings u/s 143(3) of the Act, the A.O. noticed that the assessee has debited a sum of Rs. 47,61,35,751/- as payment towards sub-contracts which were given on back-to-back basis to the JV partners. Assessee was required to furnish the details of TDS made and remitted to Government Account. Assessee furnished the details as per which the TDS was effected only on Rs. 17,80,48,272/- and the balance of Rs. 29,80,87,479/- had not suffered TDS. When the assessee was asked to show cause as to why the disallowance u/s 40(a)(ia) shall not be made on the balance of Rs. 29,80,87,479/-, the assessee submitted that the Joint Venture (JV) and its constituent members do not have a contractor and sub-contractor relationship between them and hence, there is no liability on the JV to deduct tax at source under section 194C of the Act. The Assessing Officer, however, was not convinced with the assessee’s contention and held that the assessee is liable to make TDS. Therefore, invoking the provisions of section 194C of the Act, A.O. disallowed the said sum u/s 40(a)(ia) of the Act and brought it to tax.

Aggrieved, assessee preferred an appeal before the CIT(A), who allowed the same by following the decision of the ITAT in the assessee’s own case for the A.Ys 2009-10 and 2010-11 in ITA No.372/Hyd/2013, dated 18.12.2013. Against the relief granted by the CIT(A), Revenue is in appeal before us.

Learned Departmental Representative supported the orders of the authorities below while the Learned Counsel for the Assessee supported the order of the CIT(A) and also field copy of the decision of

Having regard to the rival contentions and the material on record, we find that the similar issue had arisen in the assessee’s own case in the earlier assessment years and this Tribunal has held that there is no contractor and sub-contractor relationship between the assessee and its constituent members of JV and therefore, we see no reason to interfere with the order of the CIT(A), which is an order passed by following the decision of the ITAT. 6. In the result, Revenue’s appeal is dismissed. Pronounced in the open Court on 29th November, 2018.