Itxa/252/2012 Of The Commissioner Of Income Tax -Ii v. Smc Ambikar Jv

*1* IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.252 OF 2012 Commissioner of Income-Tax, Thane-II -Versus-M/s. SMC Ambika JV ..Appellant ..Respondent ........... Mr. Suresh Kumar for the Appellant. ........... CORAM: S.C. DHARMADHIKARIAND B.P. COLABAWALLA, JJ. DATE :- 11[th] June, 2014 P.C.: 1]This appeal is directed against the order passed by the Tribunal on 29[th] July, 2011. The assessment year in question is 2007-08. 2]The Tribunal allowed the assessee's appeal and reversed the concurrent orders including that of the Commissioner of Income Tax (Appeals)-I, Thane, passed on 30[th] July, 2010. 3]Mr. Suresh Kumar submits that the Tribunal seriously erred in allowing the appeal. The appeal raises a substantial question of law as would be evident from the nature of the arrangement between the parties. The Tribunal merely relied upon the absence of a written contract to hold that there is no relationship of a sub-contractor between the assessee and 1/3 *2* 11.itxa252.12 M/s. SMC Infrastructure Pvt. Ltd. and M/s. Ambika Enterprises. Mr. Suresh Kumar would submit that this would facilitate violation of section 194C of the Income Tax Act, 1961. In that event, the tax would not be deducted at source for the payments made even to sub-contractors. 4]We are unable to agree. 5]The tribunal found that the assessee is an Association of Persons(AOP). The association comprises of M/s. SMC Infrastructure Pvt. Ltd. which is a company incorporated under the Indian Companies Act, 1956 and M/s. Ambika Enterprises which is a proprietary firm. The association was for the purposes of bidding for contract of the Thane Municipal Corporation. It is the association which placed its bid and was eventually awarded the contract by the Thane Municipal Corporation on 16[th] November, 2004. The Tribunal noted this admitted fact in para-9 of the order under challenge and found that the contract received from Thane Municipal Corporation was made over to the two entities noted above. The work was carried out by these two entities. The amount was received after the work was carried out and the same was handed over to the members to enable them to execute the contract. The association has neither kept any commission of its own nor any profit. The association comprising of these two members/partners joined together for the purposes of executing the project. It is in such circumstances, that no 2/3 inference of any sub-contractorship can be drawn. It is not correct to say that the Tribunal insisted on any written contract evidencing such relationship. The Tribunal noted the admitted facts and found that there is no sub-contract or relationship of a sub-contractor emerging from this undisputed factual position. It is in these circumstances, that it held that section 194 C(2) of the Income Tax Act has no application to the facts of the assessee's case. 6]We do not find that such a view of the Tribunal suffers from any serious legal infirmity far from perversity. We do not find that the view taken in the peculiar facts of the case raises any substantial question of law. The appeal is, therefore, devoid of any merits and is dismissed. (B.P.COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.) wadhwa 3/3