Case Law Details
Case Name : Linde AG, Linde Engineering Division And Anr. Vs DDIT (Delhi High Court)
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Linde AG, Linde Engineering Division & Anr. Vs DDIT (Delhi High Court)
Hon’ble high court held that ‘mere cooperation’ between consortium members not results in an AOP. High Court held that where there is an independent / separate scope of work for each member coupled with no profit / loss or risk sharing between the members, there should be no AOP under Income Tax Act,1961, notwithstanding that a consortium may have signed an agreement with the project owner jointly. Please become a Premium member. If you are already a Premium member, login here to access the full content.
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102. We do not propose to examine these questions for the first time in these proceedings.
103. In view of the foregoing, the impugned ruling is set aside and we remand the matter to the Authority for deciding the same afresh and in accordance with the views expressed herein.
104. Accordingly, the petition and application stand disposed of.
UQ
The HC, it is to be noted, has disagreeing with the adverse view taken by the AAR, set aside the RULING as urged by the Applicant / Writ- Petitioner. By doing so, the court has, no doubt, brought about sufficient clarity on the point of dispute (issue- nay, a non-issue) namely, why ‘consortium’ (of its kind, with a domestic company and a foreign company as its constituents) cannot be treated as an ‘AOP’ and assessed as such. The view so taken has direct relevance to the self-same point as discussed in the recently published Article @
https://taxguru.in/income-tax/analysis-itat-chennai-order-applicability-section-167b-income-tax-act-1961.html
It is noteworthy that each one of the grounds / reasoning given by the AAR in coming to its conclusion has been squarely dealt with, in detail, and effectively countered.
On the flip side, however, in one’s tentative view, the operative portion of the Judgment (Paragraph 103) has the obviously unintended consequence of giving rise to, in its wake, a spate of fresh controversies/ unforeseen problems.
OVER to International tax law experts for deliberation and eminent thoughts/ views to share.
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