Income Tax Officer TDS Ward-3(3), Bangalore V. M/s The Coffee Board Employees Co-op Housing Society Limited , Bangalore

ITA 1369/BANG/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2181 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 15-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E S NAGENDRA PRASAD
• Keywords: Tax effect
• Section: 12; 2; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR , JUDICIAL MEMBER ITA NO. 1369 /BANG/201 7 ASSESSMENT YEAR S : 201 1 - 1 2 INCOME TAX OFFICER, TDS WARD-3(3), 4 TH FLOOR, H. M. T. BHAVAN, BELLARY ROAD, BANGALORE 560 032. VS. M/S. THE COFFEE BOARD EMPLOYEES CO-OP HOUSING SOCIETY LIMITED, NO.1, DR. AMBEDKAR VEEDHI, BANGALORE 560 001. PAN : AACT 1199 E APPELLANT RESPONDENT REVENUE BY : S HRI. E. S. NAGENDRA PRASAD, CIT - DR ASSESSEE BY : SHRI. ARVIND V. CHAUHAN, ADVOCATE DATE OF HEARING : 1 5 . 11 .201 8 DATE OF PRONOUNCEMENT : 16 . 11 .201 8 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER THE PRESENT APPEAL IS FILED BY THE REVENUE ON THE FOLLOWING COMMON GROUNDS: 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 CONSIDERED THE FACT THAT: AS PER THE ASSESSEE'S AGREEMENT WITH THE DEVELOPER THE WORKS TO BE CARRIED OUT LIKE LEVELLING, CONSTRUCTING DRAWINGS AND CULVERTS, METALLING AND ASPHALTING ROADS, PROVIDING ELECTRICITY, ETC. CLEARLY INDICATES THAT THE CONTRACT INCLUDED 'WORKS CONTRACT' WHICH ATTRACTS PROVISIONS OF SECTION 194C. ITA NO. 1369BANG/2017 PAGE 2 OF 3 5. THE LD. 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 SECTION 194C IS CLEARLY APPLICABLE. 6. THE LD. CIT(A) ERRED IN RELYING ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. KARNATAKA STATE JUDICIAL DEPARTMENT EMPLOYEES HOUSE BUILDING CO-OPERATIVE SOCIETIES IN ITA NO. 1275 OF 2006 AND THE 1TAT'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 AC) 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. 2. AT THE OUTSET, THE REVENUE HAS FILED A LETTER DATED 14.11.2018 WHEREIN IT IS MENTIONED THAT THE TRIBUNAL MAY TREAT THE PRESENT APPEAL AS AN APPEAL FILED UNDER SECTION 201(1) OF THE ACT. AS SUCH, WE WOULD BE TREATING THE PRESENT APPEAL AS AN APPEAL UNDER SECTION 201(1) OF THE INCOME TAX ACT AND THE PRESENT APPEAL WITH RESPECT TO ORDER PASSED UNDER SECTION 201(1)(A) IS THEREFORE DISMISSED. EVEN OTHERWISE, THE REVENUE IS DUTY BOUND TO FILE SEPARATE APPEALS FOR THE ORDER PASSED BY THE LEARNED CIT(A) UNDER SECTION 201(1) AND 201(1)(A). THE PRESENT APPEAL IS BEING FILED BY THE REVENUE ON THE GROUND THAT THE ASSESSEE HAS NOT DEDUCTED THE TDS WHILE MAKING THE PAYMENT TO THE AGENCIES BHAGYASHREE DEVELOPER, JAAJI DEVELOPER AND JAAJI PROMOTERS WHO HAVE DEVELOPED THE RESIDENTIAL COMPLEX FOR THE EMPLOYEES. 3. THE LEARNED CIT(A) RELYING UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE MATTER OF KARNATAKA STATE JUDICIAL DEPARTMENT EMPLOYEES HOUSE BUILDING CO-OPERATIVE SOCIETY LTD., IN ITA 1275/2016 AND ALSO OF THE CO-ORDINATE BENCH IN ITA 1324/2015 HAS DECIDED THE ISSUE OF THE ASSESSEE AND AGAINST THE REVENUE. 4. THE LEARNED DR, RELIED UPON THE ORDER PASSED BY THE AO. PER CONTRA, HAS DRAWN OUR ATTENTION TO THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE MATTER OF ITA NO. 1369BANG/2017 PAGE 3 OF 3 KARNATAKA STATE JUDICIAL DEPARTMENT EMPLOYEES HOUSE BUILDING CO-OPERATIVE SOCIETY LTD., WHEREIN IN PARAGRAPH 4, IT WAS HELD AS UNDER: ..THE SHORT QUESTION 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 REQUIRED TO DEDUCT THE TAX AT SOURCE OR NOT. WHEN THE ASSESSEE IS ONLY A PURCHASER, IF ANY ADVANCE SALE CONSIDERATION IS PAID, THE ASSESSEE HAS NO BUSINESS TO DEDUCT THE TAX AT SOURCE AS IT IS FOR THE SELLER OF THE SITES TO PAY THE CAPITAL GAINS DEPENDING UPON THE TAX PAYABLE BY HIM.' 5. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY DISCREPANCY IN THE DECISION OF THE LEARNED CIT(A). ACCORDINGLY, THE REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF NOVEMBER, 2018. SD/- SD/- BANGALORE. DATED: 16 TH NOVEMBER, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. ( A. K. GARODIA ) ( LALIET KUMAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER