The Commissioner of Income-tax, Jabalpur v. Kishori Lal Loomba & Sons - 2015-LL-0513-78

Citation	2015-LL-0513-78
Appellant Name	The Commissioner of Income-tax, Jabalpur
Respondent Name	Kishori Lal Loomba & Sons
Court	HIGH COURT OF MADHYA PRADESH
Relevant Act	Income-tax
Date of Order	13/05/2015
Judgment	View Judgment
Keyword Tags	memorandum of understanding • civil contractor • question of law • joint venture • sub-contract • commission expenses
Bot Summary:	For execution of work, the assessee was not having the financial capacity and had certain difficulties 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 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 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 it cannot be said that the assessee entered into a sub- contract. 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. Shri Sanjay Lal tried to emphasize that the agreement entered into between the assessee and M/s Loomba and Broca is a sub- contract. 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. 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.

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

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