Income Tax, Jabalpur v. M/S Kishori Lal Loomba & Sons Respondentpresent :Hon'ble Shri Justice Rajendra Menonhon'ble Shri Justice M. C. Garg

ITA-109-2012 (THE COMMISSIONER OF INCOME TAXVs M/S KISHORI LAL LOOMBA @ SONS) 13-05-2015 HIGH COURT OF MADHYA PRADESH :JABALPURINCOME TAX APPEAL NO. 109 OF 2012 The Commissioner of Appellant Income Tax, Jabalpur versus M/s Kishori Lal Loomba & Sons RespondentPresent :Hon'ble Shri Justice Rajendra MenonHon'ble Shri Justice M. C. Garg ................................................................................................. Shri Sanjay Lal, counsel for the appellant. Shri Ganesh Purohit, Sr. Counsel with Shri Abhishek Oswalfor the respondent. ................................................................................................... J U D G M E N T(13/05/15) This is revenue's appeal under Section 260-A of theIncome Tax Act calling in question tenability of an orderdated 12[th ] March, 2012 passed by the Income TaxAppellate Tribunal, Indore Bench in I. T. A. No.144/Jab/2009. 2.The assessee was a civil contractor and was grantedcertain work on contract basis. For execution ofwork, the assessee was not having the financialcertain work on contract basis. For execution ofwork, the assessee was not having the financial capacity and had certain difficulties, therefore, theassessee entered into the memorandum ofunderstanding with M/s Loomba and Broca forexecution of the work awarded and as per theagreement 4 % commission was to be paid forexecution of work by M/s Loomba and Broca. 2.While submitting the return for the assessment year2006-07 the assessee claimed exemption on theamount paid to M/s Loomba and Broca and byholding that the assessee had entered into a sub-contract with M/s Loomba and Broca, the same wasdisallowed.2006-07 the assessee claimed exemption on theamount paid to M/s Loomba and Broca and byholding that the assessee had entered into a sub-contract with M/s Loomba and Broca, the same wasdisallowed. 3.The learned appellate Tribunal went into the matterand after taking note of the judgments of theSupreme Court came to the conclusion that thememorandum of understanding entered intobetween the assessee and M/s Loomba and Broca isa joint venture undertaking and, therefore, it cannotbe said that the assessee entered into a sub-contract. Holding that there is no sub-contract, theprovisions of Section 194C and Section 40 a (Ia) ofthe Income Tax Act is not applicable. Thedisallowance has been interfered with and it hasbeen held that treating the relationship between theassessee and M/s Loomba and Broca to be a jointventure undertaking, the assessment has beenconcluded. 5. Even though, Shri Sanjay Lal tried to emphasize that the agreement entered into between theassessee and M/s Loomba and Broca is a sub-contract. 6. We have considered the submissions made and ongoing through the order passed by the AppellateTribunal, it is clear that the Appellate Tribunal hasmeticulously dealt with the matter, thememorandum of understanding, nature ofrelationship, what are the ingredients necessary toconstitute a joint venture undertaking and hasrecorded a finding that the memorandum ofunderstanding between the assessee and M/sLoomba and Broca is a joint venture undertaking.7. In doing so, we are of the considered view thatthe learned Tribunal has not committed any error inallowing the appeal of the assessee and nosubstantial question of law arises for consideration.8. The appeal is therefore dismissed. (RAJENDRA MENON) JUDGE (MOOL CHAND GARG)JUDGE