INCOME TAX ACT, 1961

Section 143(3)

Assessment - Addition to income - Amount offered by member of AOP, whether to be taxed in hands of AOP -

Assessee was a joint venture constituted through a joint venture agreement holding a separate permanent account number and having status of association of persons. It declared business receipts in respect of work contracts carried out by. AO alleged that assessee had not declared any income from its business and had also not drawn a proper profit and loss account. According to AO, being an AOP, assessee was required to prepare profit and loss account and distribute the profit, if any, amongst its members. Held: Members of joint venture had duly shown income in their returns of income and have paid the tax thereon. Joint Venture and its members were being taxed at the maximum marginal rate, and thus, no loss was caused to revenue. Moreover, in terms of CBDT Circular No.7/2016, once amount was offered to tax by its members, assessee-AOP could not be saddled with the liability to pay tax in respect of the same amount.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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