TaxTMI 
TaxTMI 
2016 (4) TMI 1274
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....quired to deduct tax at source u/s 194C from the payments made to developer. (3) The learned CIT(A) ought to have considered the fact that as per the assessee's agreement with the developer, the works to be carried out like formation of roads, chip carpeting, storm water drains etc., clearly indicates that the contract included 'works contract' which attracts provisions of sec. 194C. (4) The learned CIT(A) ought to have considered the fact that the agreement entered into by the assessee with the developer are in the nature of composite contracts for works for which provisions of sec. 194C is clearly applicable. (5) The learned CIT(A) ought to have considered Clause IV.2 and 5.1(b), 5.2(b)(c) of addendum to the agreement dated 3/12/2008 wherein, though the agreement is for the acquiring of lands and formation of layouts, it is seen that the lands, after acquisition, are sold to the society and subsequently, the development of the layout is undertaken which is clearly evident of an underlying contract. Hence, TDS ought to have been made on the development works of the layout. (6) The learned CIT(A) has erred in not considering para 6.1(b) of the ag....
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..../s 201(1)A and accordingly orders were passed under aforesaid provisions. 4. Against the said orders, the appeals were filed before the CIT(A), the CIT(A) held that the role of the respondent society was facilitator and the society only procured developed sites and developed according to the norms prescribed by the co-operative society and, therefore, it was a case of a purchase of the site and, therefore, there was no element of works contract involved in the contract. Thus it was held that the provision of sec. 194C were not applicable and the reliance was placed on the decision of Jurisidiconal High Court in the case of CIT(A) V s. Karnataka State Judicial Department Employees House Building Co-operative Society in ITA No.1260 of 2005 and accordingly the CIT(A) cancelled the orders passed by the TDS Officer u/ss 201(1) and 201(1A) of the Act. 5. Being aggrieved by this, the Revenue is before us with the present appeals. 6. The learned Sr. DR drawn our attention and submitted that the agreement entered by the respondent society with the developer namely Lakshman and Eswar are in the nature of works contract. In support of this proposition, he had drawn our attention to t....
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.... whole and it is a case of contract of purchase of the developed sites and the sub sec (a) and (b) only stipulates the payment schedule, as per the stage of completion of the works it does not mean that the consideration was paid for work in terms of the works contract. He drawn our attention to the sale deeds executed by the developer in favour of the members of the respondent society, to say that it is purely a contract for the purchase of developed sites. 9. We have heard rival submission and perused the material on record. The issue in the present appeals is whether there was an obligation on the part of respondent society to deduct tax at source in respect of amount paid by the respondent society to the developer viz. Lakshman. On perusal of the said agreement, it is clear that the payment were made as per the stage of completion of work contract but the contract is only for purchase of developed sites as evidenced by sale deeds. The issue in appeal is covered by the decision of this Bench in the case of Kautilya House Building Co-operative Society Ltd., wherein it was held as follows: 8. The issue in the present appeals is whether the payments made by the responde....
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....e same to its members and inform the Second party accordingly. (c) After such allotment, the Second Party shall convey the site to the allottee after receipt of the sale consideration (at the rates stipulated in clause 5 herein below) from the First Party by executing and registering the sale deed in the jurisdictional sub-registrars office. (d) In respect of all the corner sites and 50 intermittent sites (reserved for land owners and/or their nominee) retained by the Second Party shall be disposed off by Second Party in the manner he deems fit. Clauses 1, 2 and 3 of the Sale Deed dated 27/8/2014 are as under: 1. The Vendor and confirming party in conformity with the facts stated above, today handed over actual vacant possession of the schedule site to the Purchaser. Pursuant to this deed of conveyance, a separate Possession Certificate issued confirming the site number, dimension and boundary. 2. The Purchaser shall be entitled to hold, possess, build upon and enjoy the schedule site hereby conveyed and the rents and profits received there from without any disturbance or interference by the Vendor/Developer/Confirming Party and/or any o....