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2018 (2) TMI 272

tds liability - Held that:- From the agreement/MOU’s it is seen that the assessee society has entrusted the procurement of 100 acres of land at Adigare Kallahalli Village, Sarjapur, Anekal Taluk and development of residential layout thereon with the conditions to execute civil works such as roads, common amenities, drainage, electrification, plan approval, conversion of lands from agriculture to non-agriculture status, etc., to the developer. However, the fact remains that the agreements essentially and basically relate to the purchase of land development and purchase of residential sites from the developer/contractors. - Respectfully following the ratio of the decision of the Hon’ble Karnataka High Court in the case of Karnataka State Judicial Departmental Employees House Building Society Ltd. [2010 (3) TMI 1211 - KARNATAKA HIGH COURT] it is held that there was no requirement for deduction of tax at source u/s 194C - Decided in favour of assessee - ITA Nos.1372 to 1377/Bang/2017 - Dated:- 2-2-2018 - SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER For The Appellant : Smt. Padmameenakshi, JCIT For The Respondent : Smt. Anitha R, C.A ORDER PER SHRI JA .....

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y it to developer/contractor as required u/s 194C of the Act as it was in the nature of works contract. 2.2 Aggrieved by the orders u/s 201(1) and 201(1A) of the Act dated 31/3/2016, 1/4/2016 and 5/4/2016 for asst. years 2007-08 to 2007-08 to 2012-13, the assessee preferred appeals before the CIT(A)-13, Bangalore. The ld CIT(A) allowed the aforesaid appeals filed by the assessee for asst. years vide a common order dated 30/3/2017 holding that the assessee was not liable to deduct tax at source on the payments it made to developers/contractors as the provisions of sec. 194C of the Act were not attracted in the case on hand.. 3.1 Revenue, being aggrieved by the orders of the CIT(A)-13, Bangalore dated 23/11/2016 for asst. years 2008-09 to 2014-15, has filed these appeals before the Tribunal raising the following common grounds for the aforesaid asst. years. 1. The order of CIT(A) is opposed to the facts and nature of the case on hand. 2. The Id. CIT (A) erred in holding that the assessee was not required to deduct tax at source u/s. 194C from the payments made to developer. 3. The Ld. CIT(A) erred in deleting the demand u/s. 201(1) and 201(1A). 4. The Id. CIT (A) ought to have consid .....

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of sites was not a composite contract. It is further submitted that the two decisions of the Tribunal relied upon by the ld CIT(A) have not been accepted by the Department and the same are being contested in further appeal by Revenue. 3.4 Per contra, the ld AR of the assessee supported the impugned orders of the ld CIT(A), and submitted that there is no error therein as the issue in dispute is covered by the orders of the co-ordinate benches of this tribunal which were relied on by the assessee i.e (i) Kautilya House Building Co-operative Society Ltd. (Supra); (ii) Karnataka Legislature Secretariat Employees Housing Co-op Society Ltd., in ITA Nos.1324 to 1337/Bang/2015 and (iii) Lokseva Housing Co-operative Society Ltd., in ITA Nos:219 to 225/Bang/2017. It was prayed that in the light of the above judicial precedents and facts of the case, the impugned order of the ld CIT(A) be upheld. 3.5.1 We have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncements cited. On an appraisal of the material before us, we find that there is nothing therein that shows that the assessee is liable to deduct tax at source on payme .....

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om all relevant government authorities prior to formation of layout will be obtained with the latest date for the Sy. No. in S.Medahalli and AdigaraKallahalli, SarjapuraHobli, Anekal Taluk, Bangalore. NOW THE MEMORANDUM OF UNDERSTANDING WITNESSETH AS FOLLOWS 1. ……….. 2. ……….. 3. Whereas, the total consideration payable by the second party Society to the first party Developer is @ ₹ 3751- (Rupees three hundred seventy five only) per Square feet plotted Area which includes the sale consideration paid for purchase of the lands from the First party Developer, Conversion charges and incidental expenses to be incurred in getting conversion of the land for residential purpose. Payment of the layout charges and other incidental expenses to be incurred in obtaining the layout plan approved by BMRDA/Competent and supervision charges if any to KPTCL (BESCOM) or any other authorities, etc., and any other expenses to be incurred for the formation of the Layouts as per approved plan. 4. It is agreed by and between the parties that in case the land proposed to be sold is acquired by any Authorities, in that even, of the Second Party is entitled for .....

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nd 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 contractor/developer were required to layout 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., (Supra); the relevant portion of which judgment is extracted hereunder:- the short that fell for the consideration for the Assessing Officer, the Commissioner of Income-tax and the Tribunal was whether if the assessee has agreed to purchase the sites from a vendor if any sale consideration is paid on instalment basis, the assessee is .....

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