TaxTMI 
TaxTMI 
2016 (4) TMI 1274
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....ls we proceed to dispose off these appeals by way of this consolidated order. For the sake of convenience and clarity, the facts in ITA No.1339/Bang/2015 are stated here under: 2. The Revenue has raised the following grounds of appeal : (1) The order of CIT(A) is opposed to the facts and nature of the case on hand. (2) The learned. 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 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 attr....
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....ks also, especially when the supplemental agreement envisages the release of payment on a milestone basis which is typical of 'contracts'? 3. The brief facts of the case are that the respondent society duly incorporated under the provisions of Karnataka State Co-operative Society Act. The society was set up for the purpose of acquiring the land and developing the same into the house sites to its members and associate members. The survey operation under the provisions of sec.133A of the Income-tax Act were carried out in the premises of the respondent society on 14/10/2013 by ITO, TDS Ward-18(1), Bangalore (hereinafter called as TDS Officer). Subsequently, TDS Officer called for certain information from the respondent society including deta....
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....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 the clause 6.1 of the sub clause (a) (b) (c) and (d) of clause 6.1 of the agreement entered by the respondent ....
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....ed as advance (as per clause 6.1 a & b) and during the course of implementation of the project as provided hereinabove shall be adjusted by the Second Party Developer towards sale consideration of the sites as per 6A & 6B to be conveyed to the members of the Society." 7. He also submitted that mere perusal of the above clause goes to prove that the agreement were entered only to development of the site which involves works as he also submitted that the facts in the present appeals are different from the facts in the case of Kautilya House Building Co-operative society decided by this Tribunal. 8. On the other hand, the learned Authorized Representative of the respondent society submitted that the terms and agreement should be construed as....
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....at payments made to Shri Lakshman are not in the nature of works contract, question of deducting tax at source under the provisions of sec.194C does not arise. To determine the character of payments, it is essential to look into terms of the contract. We have perused the agreement dated 11/4/2005 entered into by the respondent-co-operative society with Shri Lakshman as well as the sale deed entered into by Shri Lakshman with members of the society on 27/8/2014 placed at page 11 of the paper book. Clauses 2, 3 and 4 of the agreement dated 11/4/2005 are as under: "2. DEVELOPMENT OF LAYOUT & FORMATION OF SITES: The Second Party shall acquire the schedule property after securing conversion of the same from agriculture to non-agriculture res....
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.... 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....