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2017 (10) TMI 726 - AT - Income TaxTDS u/s 194C - Liability to deduct tax at source on payments made to the developers - Held that:- As observed by the AO, the agreement/MOU’s entered into by the assessee society with the other developers/contractors also contain clauses similar to the above. On appeal, the ld CIT(A) on perusal of the aforesaid clauses of the agreements has arrived at the conclusion that the payments for the purchase of the sites was calculated on sq. ft. area of the property and the amount was paid for the purchases of completed property and not for development work carried out. CIT(A) found that the agreements were only for purchase of sites and does not involve any ‘works contract’. In our view, the aforesaid conclusion/finding of the ld CIT(A) cannot be faulted and the same is a correct reading of the scope of the agreements; which has to be treated as a whole and not in piece meal manner. The mere fact that the contractors/developers were required to lay’out roads and undertake other activities before the delivery of the completed sites cannot be either determinative of the facts or need to mean that the agreements entered into by the assessee society is a composite contract and amounts to a works contract. Thus, in our considered opinion, the case of the assessee is squarely covered by the decisions of the Hon’ble Karnataka High Court in the case of Karnataka State Judicial Department Employees House Building Co-operative Society Ltd., (2010 (3) TMI 1211 - KARNATAKA HIGH COURT). We, therefore, uphold the impugned orders of the ld CIT(A) deleting the demands raised by the AO u/s 201(1) and 201(1A) of the Act. - Decided against revenue
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