TaxTMI 
TaxTMI 
2014 (9) TMI 1298
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.... representative, is that the assessee has undertaken works contract and not developed the housing project. According to the ld. representative, the land is owned by the assessee. The project was conceived and executed by the assessee. The flat was sold to independent prospective purchasers. According to the ld. representative, if the assessee is not the developer of the housing project, then it is not known, who else developed the project. The ld. representative submitted that a prospective purchaser of a flat on the 16th floor of the building cannot be a developer of the entire building. The assessee constructed the building as per the plan approved by the Cochin Corporation by providing all infrastructure facilities like car park, drainage system, water supply, common space, lift and other facilities to the entire occupants of the building. The ld. representative by citing an example pointed out that suppose a prospective purchaser buys a flat on the 16th floor from the assessee and wants to construct the same by himself, can he construct the flat at 16th floor, without foundation and construction of 15th floor is completed? In that case, who will construct the building upto 15th....
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.... the Kerala High Court in Kerala Builders Forum vs State of Kerala (2009) (4) KLT 658 and submitted that on identical circumstances, the Kerala High Court found that it is the responsibility of the builder / land owner to complete the apartment in accordance with building permit obtained from the local authority; therefore, it is not the works contractor. The ld. representative has also placed his reliance on the decision of the Chennai Bench of this Tribunal in the case of Sanghvi & Doshi Enterprise VS ITO (2011) 131 ITD 151 (Chen). The ld. representative further submitted that the Madras High Court confirmed the decision of the Chennai Bench of this Tribunal in Sanghvi & Doshi Enterprise (2013) 29 taxmann.com 386 (Madras). Referring to the copies of the sample agreements said to be executed between the assessee and the prospective purchasers, the ld. representative submitted that only after completion of construction, the assessee has to handover the possession of the flat to the prospective purchaser. In case the assessee fails to execute the sale deed in respect of the proportionate undivided share of the land to the prospective buyer the right of specific performance was given....
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....ver the flat on sixteenth floor unless the sixteenth floor of the building was constructed. Some of the flats in some of the floors may remain to be sold also. But the assessee has to construct the entire building as per the approved plan and create infrastructure facilities like parking area, drainage facility, drinking water facility, fire extinguishment, lift, etc. These facilities cannot be provided by the individual purchaser of a particular flat. This Tribunal is of the considered opinion that the assessee being the owner of the land and developer of the housing project constructed the flat by creating all infrastructure facilities and sold the same to the individual purchasers. The individual purchasers cannot award any work to the assessee. In fact, it is not the choice of the individual purchasers to award work to the assessee. The individual purchaser has to purchase the flat only from the construction made by the assessee. When the purchasers have no choice of selecting the builders for construction on a project being developed by the assessee, this Tribunal is of the considered opinion that the purchaser cannot award any work to the assessee. Therefore, the contention o....
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.... Act, 2007 was challenged. The Kerala legislature by Kerala Finance Act, 2007, has amended the Stamp Act, 1959 which provided levy of stamp duty on the flat fully constructed and sold by the builders to the prospective purchasers. The prospective purchasers has to enter into an agreement for purchase of undivided share of land and simultaneously has to enter into construction of flat also. The contention of the state government was that when the builders sold the fully constructed flats then stamp duty has to be paid for the land as well as the flat. And to avoid stamp duty on the value of the building, the individuals, who purchased the flat entered into an agreement of sale of undivided share of land and simultaneously entered into an agreement for construction of flat for him. Therefore, it was contended before the Kerala High Court that it was a works contract. The Kerala High Court, after considering an identical agreement as entered into in the case before us found that it is not a works contract. The Kerala High Court further found that the agreements were so made to appear the transaction is one of works contract, but in fact it is not a works contract. 12. In the case bef....