TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 272
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.... of payments made to developers/contractors and tax deducted thereon. From the details filed, the AO noticed that the assessee had entered into certain agreements and MOU's, with the developer/contractor M/s Lion Estates and Properties for carrying out the above activities and had failed to deduct tax at source on payments made to these parties with whom it had entered into agreements for the acquisition of land and formation of residential layout for the benefit of its members (requiring the carrying out of civil work such as laying of roads, drainage, electrification, etc.); which were in the nature of composite work contracts. The AO, inter alia, noticed that the aforesaid layout is to be developed as per the assessee's specifications and the words procurement of land meant that the developer does not own any land as on the date of agreement. In that view of the matter, the AO held that the aforesaid work, carried out by the developer/contractor on behalf of the assessee, is the nature of works contract and therefore the provisions of Sec. 194C of the Act was attracted. Since the assessee has failed to deduct tax at source on payments its made to developers/contractors as requir....
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....#39;s order in the case of M/s. Kautilya House Building Co-Operative Society Limited in ITA No. 1324 to 1337/Bang/2015 dated 7.4.2016 while allowing the assessee's appeal which have been accepted by the Department only for low tax effect and not in principle. For these and other grounds that may be raised during the course of appeal and actual hearing it is prayed that the order passed by the AO u/s. 201(1) and 201(1A) be upheld and the order of the learned Commissioner of Income Tax (Appeals) may be set aside and cancelled." 3.2 The grounds raised (Supra) relates to the single issue pertaining to the deletion of the demands raised u/s 201(1) and 201(1A) of the Act by the ld CIT(A) by following the decision of the co-ordinate bench of this Tribunal in the case of Kautilya House Building Cooperative Society in ITA No.1334 to 1337/Bang/2015 dated 7/4/2016, which had in turn followed the decision of the Hon'ble High Court of Karnataka in the case of Karnataka State Judicial Department Employees House Building Co-operative Society Ltd., (Supra). 3.3 The ld DR for Revenue was heard in support of the grounds raised (Supra). It is the contention of Revenue that the activity menti....
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....lture 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. The relevant portion of the agreement of the assessee society with M/s Lion Estates and Properties i.e; developmental contractor is as under:- "Whereas the first party is a Developer-cum-Builder, having a vast experience in the field of acquisition and formation of residential Layouts and formed private layouts in around the Bangalore Metropolitan city. Whereas, the Second party is a Co-operative housing society whose in objective is to provide house sites, and accordingly has formed several layouts and distributed sites for the benefit of its members. However due to non-availability of land, it could not allot sites to all its members and hence in order to allot sites to the remaining members and also to meet the increasing demand, the society has resolved to acquire land in and around Bangalore. Whereas the second party approached the First Party Developers and offered a proposal to develop these lands and provide the society a private la....
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....y of the party of the First Party they would form a layout by providing the following civic amenities: a) Formation of Roads with side drains and culverts. b) Asphalting of Roads as per residential layout norms. C) Laying of sanitary lines with manholes. d) Laying of water pipes. e) Drilling of Bore Wells with sufficient water source, with overhead Tank and sump. f) Providing and erecting of electricity poles. Conductor, transformers, streetlights etc., g) Name Board with site numbers, layout plan, display board etc., h) Planting of saplings and tree guards. i) Water and Sanitary points to each plot. j) Provision of septic tank. k) Arch & Compound wall with security room will be provided at the front portion of the project. 8. The First party Developer agreed to complete the project and deliver the possession of the entire converted land along with the plan approval from BMRDA to the Second party Society within a period of Eighteen months from this M.O.U. 9. The First party Developer shall keep the Second party Society fully indemnified and harmless against all proceedings, claims or damages that may incur by the acts of the first party Develo....
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....d as an agreement in the nature of works contract. A contractor is one who I undertakes to do a particular work-for a price. No such contract is envisaged in this agreement. This agreement envisages purchase of specified intermediate sites at a price after Sri Lakshman completes the job of formation of a layout either infti1 or in part. We accordingly hold that the assessee was not required to deduct tax in this regard." 3.5.6 We find that Revenue's contention that the aforesaid judgment of the Hon'ble Karnataka High Court in the case of Karnataka State Judicial Department Employees House Building Co-operative Society Ltd., (Supra) is distinguishable from the case on hand has also been considered on similar fact situation, by co-ordinate benches of this Tribunal in the cases of Karnataka State Co-operative Subhadranna Housing Federation Ltd. (ITA Nos.1301, 1307 to 1313/Bang/2015), Railway House Building Co-operative Society (ITA Nos.1139, 1140 & 1344/Bang/2015 & 1343/Bang/2014), and in the case of Kautilya House Building Co-operative Society Ltd., (ITA Nos. 1324 to 1337/Bang/2015 dated 7/4/2016. The ld CIT(A) has observed that in these cases (Supra) also, the contents of the agre....