Income Tax Officer TDS Ward-3(3), Bangalore V. M/s UAS Employees House Building Co-operative Society Ltd , Bangalore

ITA 1485/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5551 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Non-deduction of tax; Competent authority; Tax effect
• Section: 133(6); 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NOS.1485 TO 1487/BANG/2017 (ASST. YEAR - 2012- 13 TO 2014-1 5) THE INCOME-TAX OFFICER, TDS WARD-3(3), BENGALURU. . APPELLANT VS. M/S UAS EMPLOYEES HOUSE BUILDING CO-OPERATIVE SOCIETY LTD., NO.1, POST OFFICE BUILDING, UAS CAMPUS, HEBBAL, BENGALURU. . RESPONDENT APPELLANT BY : SHRI B.R RAMESH, ADDL. CIT RESPONDENT BY : SHRI S.V RAVISHANKAR, ADVOCATE DATE OF HEARING : 5-2-2018 DATE OF PRONOUNCEMENT : -2-2018 O R D E R PER SHRI JASON P BOAZ, ACCOUNTANT MEMBER : THESE ARE THREE APPEALS BY THE REVENUE, DIRECTED AGAINST THE ORDER COMMISSIONER OF INCOME-TAX (APPEALS) 13, BA NGALORE DATED 29/12/2016 FOR THE ASSESSMENT YEARS 2012-13 TO 2014 -15. SINCE COMMON ISSUES ARE INVOLVED, THESE APPEALS WERE HEAR D TOGETHER AND ARE BEING DISPOSED OFF TOGETHER BY WAY OF THIS ORD ER. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UND ER:- ITA NOS.1485 - 1 487/B/17 2 2.1 THE ASSESSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN THE ACTIVITY OF IDENTIFYING SUITABLE LANDS AND FORMING A RESIDENTIA L LAYOUT FOR ALLOTMENT OF RESIDENTIAL SITES TO ITS MEMBERS. THE ASSESSING OFFICER (AO) CALLED FOR INFORMATION U/S 133(6) OF THE IN COME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE DETAILS OF P AYMENTS MADE TO DEVELOPERS/CONTRACTORS AND TAX DEDUCTED THEREON. F ROM THE DETAILS FILED, THE AO NOTICED THAT THE ASSESSEE HAD ENTERED INTO CERTAIN AGREEMENTS AND MOUS, WITH THE DEVELOPER/CONTRACTOR SHRI LAKSHMAN FOR CARRYING OUT THE ABOVE ACTIVITIES AND HAD FAIL ED TO DEDUCT TAX AT SOURCE ON PAYMENTS MADE TO THESE PARTIES WITH WHOM IT HAD ENTERED INTO AGREEMENTS FOR THE ACQUISITION OF LAND AND FOR MATION 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 IN HIS VIEW WERE IN T HE NATURE OF COMPOSITE WORK CONTRACTS. THE AO, INTER ALIA, NOTI CED THAT THE AFORESAID LAYOUT IS TO BE DEVELOPED AS PER THE ASSE SSEES SPECIFICATIONS AND THE WORDS PROCUREMENT OF LAND MEANT THAT THE DE VELOPER 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 REQ UIRED U/S 194C OF THE ACT; AO HELD THE ASSESSEE TO BE AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT AND ALSO TO BE CHARGED THE CONSEQUENTIAL INTEREST U/S ITA NOS.1485 - 1 487/B/17 3 201(1A) OF THE ACT. THE EXPLANATIONS PUT FORTH BY THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO AND HE PASSED ORDERS U/S 201(1) AND 201(1A) OF THE ACT FOR ASST. YEARS 2007-08 TO 2012- 13 DATED 31/3/2016, 1/4/2016 AND 5/4/2016 HOLDING THE ASSESS EE TO BE AN ASSESSEE IN DEFAULT FOR FAILURE TO DEDUCT TAX AT SO URCE ON PAYMENTS MADE BY IT TO DEVELOPER/CONTRACTOR AS REQUIRED U/S 194C OF THE ACT AS IT WAS IN THE NATURE OF WORKS CONTRACT. 2.2 AGGRIEVED BY THE ORDERS U/S 201(1) AND 201(1A) OF THE ACT DATED 11/3/2014 FOR ASST. YEARS 2012-13 TO 2014-15 , THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A)-13, BANGALORE. THE LD CIT(A) ALLOWED THE AFORESAID APPEALS FILED BY THE ASSESSEE FOR ASST. YEARS VIDE A COMMON ORDER DATED 29/12/2016 HOLDING THAT THE AS SESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE ON THE PAYMENTS IT M ADE TO DEVELOPERS/CONTRACTORS AS THE PROVISIONS OF SEC. 19 4C OF THE ACT WERE NOT ATTRACTED IN THE CASE ON HAND.. 3.1 REVENUE, BEING AGGRIEVED BY THE ORDERS OF THE C IT(A)-13, BANGALORE DATED 23/11/2016 FOR ASST. YEARS 2008-09 TO 2014-15, HAS FILED THESE APPEALS BEFORE THE TRIBUNAL RAISING THE FOLLOWING COMMON GROUNDS FOR THE AFORESAID ASST. YEARS. 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 ASSESS EE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S. 194C FROM THE PAYMENTS MADE TO DEVELOPER. ITA NOS.1485 - 1 487/B/17 4 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 FAC T THAT AS PER THE ASSESSEE'S AGREEMENT WITH THE DEVELOPER THE WORKS TO BE CARRIED OUT LIKE FOR PROCURING OF LAND, DEVELOPING, CONVERSION, PLAN FOR APPROVAL, DRAINAGE , LAYING ROADS ETC. CLEARLY ATTRACTED PROVISIONS OF S ECTION 194C. 5. THE ID. CIT (A) OUGHT TO HAVE CONSIDERED THE FAC T THAT THE AGREEMENT ENTERED INTO BY THE ASSESSEE WIT H THE DEVELOPER ARE IN THE NATURE OF COMPOSITE CONTRACTS FOR WORKS FOR WHICH PROVISIONS OF SECTION 194C IS CLEAR LY 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 TAT'S ORDER IN THE CASE OF M/S. KAUTILYA HO USE BUILDING CO-OPERATIVE SOCIETY LIMITED IN ITA NO. 13 24 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 PRINC IPLE. 7. THE APPEALS HAVE BEEN FILED FOR ALT THE ASSESSME NT YEARS INCLUDING THE ASSESSMENT YEARS WHERE THE TAX EFFECT IS BELOW THE PRESCRIBED MINIMUM SINCE A COMPOSITE O RDER ITA NOS.1485 - 1 487/B/17 5 HAS BEEN PASSED BY THE CT(A) AND THEREFORE PARA 5 O F THE CBDT'S CIRCULAR NO. 21 OF 2015 DATED 10. 12.70,15 I S APPLICABLE IN THIS CASE. FOR THESE AND OTHER GROUNDS THAT MAY BE RAISED DURING THE COURSE OF APPEAL AND ACTUAL HEARI NG 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 ASI DE AND CANCELLED. 3.2 THE GROUNDS RAISED (SUPRA) RELATES TO THE SINGL E ISSUE PERTAINING TO THE DELETION OF THE DEMANDS RAISED U/S 201(1) AN D 201(1A) OF THE ACT BY THE LD CIT(A) BY FOLLOWING THE DECISION OF T HE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF KAUTILYA HOUS E BUILDING CO- OPERATIVE SOCIETY IN ITA NO.1324 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 D EPARTMENT EMPLOYEES HOUSE BUILDING CO-OPERATIVE SOCIETY LTD. , IN ITA NO.1275 OF 2006. 3.3 THE LD DR FOR REVENUE WAS HEARD IN SUPPORT OF T HE GROUNDS RAISED (SUPRA). IT IS THE CONTENTION OF REVENUE TH AT THE ACTIVITY MENTIONED IN THE AGREEMENTS ENTERED INTO BY THE ASS ESSEE WITH DEVELOPERS/CONTRACTORS CLEARLY INDICATE THAT THEY A RE COMPOSITE CONTRACTS FOR ACQUIRING LAND, FORMING RESIDENTIAL L AYOUTS THEREON WITH ATTENDANT CIVIL WORKS AND THEREFORE, SINCE IT AMOUN TS TO A COMPOSITE ITA NOS.1485 - 1 487/B/17 6 WORKS CONTRACT, THE PROVISIONS OF SECTION 194C OF T HE ACT ARE APPLICABLE. ACCORDING TO THE LD DR, THE JUDGMENT O F THE HONBLE KARNATAKA HIGH COURT RELIED ON BY THE LD CIT(A) (SU PRA) IN DISTINGUISHABLE AS IN THAT CASE, THE CONTRACT FOR P URCHASE OF SITES WAS NOT A COMPOSITE CONTRACT. IT IS FURTHER SUBMITTED THAT THE TWO DECISIONS OF THE TRIBUNAL RELIED UPON BY THE LD CIT(A) HAVE N OT BEEN ACCEPTED BY THE DEPARTMENT AND THE SAME ARE BEING CONTESTED IN FURTHER APPEAL BY REVENUE. 3.4 PER CONTRA, THE LD AR OF THE ASSESSEE SUPPORTED THE IMPUGNED ORDERS OF THE LD CIT(A), AND SUBMITTED THAT THERE I S NO ERROR THEREIN AS THE ISSUE IN DISPUTE IS COVERED BY THE ORDERS OF TH E CO-ORDINATE BENCHES OF THIS TRIBUNAL WHICH WERE RELIED ON BY TH E ASSESSEE I.E (I) KAUTILYA HOUSE BUILDING CO-OPERATIVE SOCIETY LTD. ( SUPRA); (II) KARNATAKA LEGISLATURE SECRETARIAT EMPLOYEES HOUSING CO-OP SOCIETY LTD., IN ITA NOS.1324 TO 1337/BANG/2015 AND (III) L OKSEVA HOUSING CO-OPERATIVE SOCIETY LTD., IN ITA NOS:219 TO 225/BA NG/2017. IT WAS PRAYED THAT IN THE LIGHT OF THE ABOVE JUDICIAL PRE CEDENTS AND FACTS OF THE CASE, THE IMPUGNED ORDER OF THE LD CIT(A) BE UP HELD. 3.5.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JU DICIAL PRONOUNCEMENTS CITED. ON AN APPRAISAL OF THE MATER IAL BEFORE US, WE FIND THAT THERE IS NOTHING THEREIN THAT SHOWS THAT THE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE ON PAYMENTS MADE TO THE DEV ELOPERS IN THE YEARS UNDER APPEAL. ITA NOS.1485 - 1 487/B/17 7 3.5.2 NOW COMING TO THE MERITS OF THE ISSUE IN DIS PUTE, IT IS SEEN THAT THE ASSESSEE SOCIETY HAS ENTERED INTO AGREEMENT/MOU S WITH DEVELOPER/CONTRACTOR SHRI LAKSHMAN, NO.548, IV MAIN , 2 ND STAGE, WEST OF CHORD ROAD, MAHALAKSHMIPURAM BANGALORE-560 086 DATED 5/2/2011, 28/6/2012 AND 30/11/2012. FROM THE AFORES AID AGREEMENT/MOUS IT IS SEEN THAT THE ASSESSEE SOCIET Y HAS ENTRUSTED THE PROCUREMENT OF 15 ACRES 39 GUNTAS OF LAND AT SY. NO S.15/1, 15/2, 16/2, 17/2 AND 18 OF HOSAHUDYA VILLAGE, KASABA HOBLI, DOD DABALLAPUR TALUK, BANGALORE RURAL DISTRICT AND DEVELOPMENT OF RESIDENTIAL LAYOUT THEREON WITH THE CONDITIONS TO EXECUTE CIVIL WORKS SUCH AS ROADS, COMMON AMENITIES, DRAINAGE, ELECTRIFICATION, PLAN A PPROVAL, CONVERSION OF LANDS FROM AGRICULTURE TO NON-AGRICUL TURE 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 DEVELOPE R/CONTRACTORS. THE RELEVANT PORTION OF THE AGREEMENT OF THE ASSESSEE S OCIETY WITH M/S LION ESTATES AND PROPERTIES I.E; DEVELOPMENTAL CONT RACTOR IS AS UNDER:- I. WHEREAS, THE SOCIETY IS A CO-OPERATIVE HOUSE BUILDING SOCIETY, REGISTERED UNDER THE PROVISIONS O F THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959, CONSTITUTED FOR THE PURPOSE OF FORMATION OF RESIDENTIAL LAYOUTS AND DISTRIBUTION OF SITES OF IT S MEMBERS. THE DEVELOPER IS A RENOWNED DEVELOPER AND BUILDER AND HAS COMPLETED SEVERAL PROJECTS IN BANGALORE CITY. ITA NOS.1485 - 1 487/B/17 8 II. WHEREAS, IN ORDER TO CATER TO THE NEEDS OF ITS MEMBERS THE SOCIETY HAS DECIDED TO TAKE UP A PROJEC T TO FORM A RESIDENTIAL LAYOUT, IN FURTHERANCE OF WHICH THE SOCIETY ADDRESSED A LETTER DATED 04.08.2010 TO THE DEVELOPER, INVITING PROPOSAL. THE DEVELOPER VIDE IN HIS LETTER DATED 11.08.2010 EXPRESSED HIS WILLINGNESS T O DEVELOP AND FORM A LAYOUT AND OFFERED LANDS IN SEVE RAL LOCATIONS FOR DEVELOPMENT OF RESIDENTIAL LAYOUT. TH E SOCIETY IN ITS LETTER DATED 30.08.2010, DECIDED TO GO AHEAD WITH THE PROJECT APPROXIMATELY MEASURING 15 ACRES 39 GUNTAS IN SY. NOS. 15/1, 15/2, 16/2, 17/2 & 18 OF HOSAHUDYA VILLAGE, KASABA HOBLI, DODDABALLAPUR TALUK, BANGALORE RURAL DISTRICT, WHICH THE DEVELOPE R HAS ALREADY ENTERED INTO THE SALE AGREEMENT WITH TH E LAND OWNERS AND THE SOCIETY COMMUNICATED TO THE DEVELOPER TO SUBMIT A DETAILED PROPOSAL. THE PROPOS AL OF THE DEVELOPER WAS PLACED BEFORE ITS BOARD BY THE SOCIETY AT ITS MEETING HELD ON 29.11.2010, AND THE BOARD OF THE SOCIETY ACCEPTED AND APPROVED THE PROPOSAL OF THE DEVELOPER, THE CONTENTS OF WHICH AR E REPRODUCED BELOW: A) THE SOCIETY AGREED TO PURCHASE ABOUT 650 SITES OF VARIOUS DIMENSIONS IN THE PROPOSED LAYOUT TO BE FORMED BY THE DEVELOPER, IN LAND APPROXIMATELY MEASURING 40 ACRES IN SY. NOS. 15/1, 15/2, 16/2, ITA NOS.1485 - 1 487/B/17 9 17/2 & 18 AND IN PORTION OF SY. NOS. 26 OF HOSAHYDYA VILLAGE, KASABA HOBLI, DODDABALLAPUR TALUK, BANGALORE RURAL DISTRICT. B) ALL THE TERMS AND CONDITIONS SET OUT IN THE LETT ER DATED 11.08.2010 OF THE DEVELOPER ARE HEREBY APPROVED AND ACCEPTED TO PURCHASE SITE AT THE RATE OF RS.650/- (RUPEES SIX HUNDRED FIFTY ONLY) PER SQUARE FEET FOR INTERMEDIATE SITES. C) THE DEVELOPER SHALL DEVELOP THE LAYOUT IN ACCORDANCE WITH ZONAL REGULATIONS AND THE PLAN TO BE APPROVED BY BIAAOA (BANGALORE INTERNATIONAL AIRPORT AREA PLANNING AUTHORITY). III. NOW THIS AGREEMENT WITNESSSETH AS FOLLOWS: 1. THE DEVELOPER AGREES TO ACQUIRE LANDS, DEVELOP A RESIDENTIAL LAYOUT THEREON AS PER BIAAPA (BANGALORE INTERNATIONAL AIRPORT AREA PLANNING AUTHORITY) ZONAL REGULATIONS AND DELIVER TO THE SOCIETY APPROXIMATELY 650 SITES OF VARIOUS DIMENSIONS (EXCLUDING 70% OF THE CORNER SITES OF VARIOUS DIMENSIONS AS DEVELOPER SHARE) AND 30% SITES OF VARIOUS DIMENSIONS OF CORNER SITES SPREAD OVER IN AN EXTENT OF ABOUT 40 ACRES OF LANDS SITUAT ED IN SY. NOS. 15/1, 15/2, 16/2, 17/2, 18 AND IN PORTI ON OF SY. NO.26 OF HOSAHUDYA VILLAGE, KASABA HOBLI, ITA NOS.1485 - 1 487/B/17 10 DODDABALLAPUR TALUK, BANGALORE RURAL DISTRICT, WHICH ARE MOREFULLY DESCRIBED IN THE SCHEDULE HEREUNDER AND HEREINAFTER REFERRED TO AS THE SCHEDULE PROPERTY IN THE TERMS AND CONDITIONS SET OUT HEREIN WHICH HAS BEEN AGREED UPON BETWEEN THE PARTIES. 2. THE DEVELOPER SHALL ACQUIRE THE SCHEDULE PROPERT Y AFTER SECURING CONVERSION OF THE SAME FROM AGRICULTURAL TO NON-AGRICULTURE RESIDENTIAL USE, APPLY FOR AND OBTAIN SANCTION FROM BIAAPA (BANGALORE INTERNATIONAL AIRPORT AREA PLANNING AUTHORITY)/COMPETENT AUTHORITY AND DEVELOP LAYOUT, ALL AT HIS OWN COST IN ACCORDANCE WITH THE SANCTIONED PLAN CONFIRMING TO THE ZONAL REGULATIONS OF THE BMRDA. 3. THE LAYOUT PLAN APPROVE BY THE AUTHORITY SHALL NOT BE DEVIATED BY THE DEVELOPER IN DEVELOPING THE LAYOUT. THE LAYOUT PLAN SHALL BE PERMANENTLY DISPLAYED AT THE ENTRANCE OF THE LAYOUT. HIRING OF SECURITY, TEMPORARY CONSTRUCTION OF GOWDOWN/ OFFICE/ SHEDS AND INSURANCE COVERAGES IN RESPECT TO VARIOUS RISKS ARE AT THE SOLE DISCRETION OF THE DEVELOPER. ALL THE TEMPORARY ERECTIONS IF NOT NEEDE D BY THE SOCIETY SHALL BE CLEARED BY THE DEVELOPER WITHOUT SEEKING ANY COMPENSATION. ITA NOS.1485 - 1 487/B/17 11 IV. FACILITIES & AMENITIES TO BE PROVIDED IN THE LAYOUT: THE DEVELOPER SHALL DEVELOP THE LAYOUT IN ACCORDANCE WITH THE SANCTIONED PLAN CONTAINING THE FOLLOWING FACILITIES AND AMENITIES: (A) WIDE ASPHALTED ROADS RANGING FROM 30' TO 60'S PER SANCTIONED PLAN; (B) WATER & SANITARY CONNECTIONS TO EACH SITE WITH FEEDER & SUB MA CONNECTIONS; (C) ELECTRIFICATION WITH OVERHEAD LINES AND TRANSFORMERS, ADEQUATE STREET LIGHTS AS PER KPTCL NORMS; (D) DEDICATED TELEPHONE EXCHANGE, MILK BOOTHS, KPTCL EXTENSION COUNTER, PLAY GROUND, POLICE OUT POST, BUS TERMINUS, SHOPPING ARCADE INCLUDING SUPER MARKET ETC., IN THE AREA RESERVED FOR CIVIC AMENITIES IN THE LAYOUT PLAN. (E) OVERHEAD TANK/SUMP TANK CONNECTED TO BOREWELLS IN ORDER T PROVIDE ADEQUATE WATER SUPPLY; (F) CLUB HOUSE WITH SWIMMING POOL, MULTI GYM, TENNIS COURT CHILDREN PLAY AREA, PLACE FOR RELIGIOU S WORKSHIP ETC; (G) LANDSCAPED GARDENS, ROAD SIDE TREE PLANTATION WITH TREE GUARDS; ITA NOS.1485 - 1 487/B/17 12 (H) WELCOME ARCH WITH SECURITY GATE, ENCLOSING THE ENTIRE LAYOUT BY A CEMENT SOLID BLOCK COMPOUND WHERE IT IS REQUIRED AS DECIDED BY THE SOCIETY; 3.5.4 ON APPEAL, THE LD CIT(A) ON PERUSAL OF THE AFORESAID CLAUSES OF THE AGREEMENT HAS ARRIVED AT THE CONCLUSION THAT TH E PAYMENTS FOR THE PURCHASE OF THE SITES WAS CALCULATED ON SQ. FT. ARE A OF THE PROPERTY AND THE AMOUNT WAS PAID FOR THE PURCHASES OF COMPLETED PROPERTY AND NOT FOR DEVELOPMENT WORK CARRIED OUT. THE LD CIT(A) FO UND THAT THE AGREEMENTS WERE ONLY FOR PURCHASE OF SITES AND DOES NOT INVOLVE ANY WORKS CONTRACT. IN OUR VIEW, THE AFORESAID CONCL USION/FINDING OF THE LD CIT(A) CANNOT BE FAULTED AND THE SAME IS A CORRE CT READING OF THE SCOPE OF THE AGREEMENTS; WHICH HAS TO BE TREATED AS A WHOLE AND NOT IN PIECE MEAL MANNER. THE MERE FACT THAT THE CONTRACT OR/DEVELOPER WERE REQUIRED TO LAYOUT ROADS AND UNDERTAKE OTHER ACTIVI TIES BEFORE THE DELIVERY OF THE COMPLETED SITES CANNOT BE EITHER DE TERMINATIVE OF THE FACTS OR NEED TO MEAN THAT THE AGREEMENTS ENTERED I NTO BY THE ASSESSEE SOCIETY IS A COMPOSITE CONTRACT AND AMOUNTS TO A WO RKS CONTRACT. THUS, IN OUR CONSIDERED OPINION, THE CASE OF THE AS SESSEE IS SQUARELY COVERED BY THE DECISIONS OF THE HONBLE KARNATAKA H IGH COURT IN THE CASE OF KARNATAKA STATE JUDICIAL DEPARTMENT EMPLOYE ES HOUSE BUILDING CO-OPERATIVE SOCIETY LTD., (SUPRA); THE RE LEVANT PORTION OF WHICH JUDGMENT IS EXTRACTED HEREUNDER:- ITA NOS.1485 - 1 487/B/17 13 THE SHORT THAT FELL FOR THE CONSIDERATION FOR THE ASSESSING OFFICER, THE COMMISSIONER OF INCOME-TAX A ND 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 ASSE SSEE IS REQUIRED TO DEDUCT THE TAX AT SOURCE OR NOT. WHEN T HE 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 PAY ABLE BY HIM. 3.5.5 IN THE AFORESAID CASE DECIDED BY THE HONBLE KARNATAKA HIGH COURT (SUPRA), THE CO-ORDINATE BENCH OF THIS TRIBUN AL HAD RENDERED THE FOLLOWING FINDING:- .THE AGREEMENT BETWEEN SH. LAKSHMAN, AND KARNATAKA STATE .JUDICIAL DEPARTMENT EMPLOYEES HOUS E BUILDING CO-OPERATIVE SOCIETY BEGINS TO OPERATE ONL Y AFTER THE LAYOUT IS FORMED AND SO CAN NEVER BE CONS TRUED AS AN AGREEMENT IN THE NATURE OF WORKS CONTRACT. A CONTRACTOR IS ONE WHO I UNDERTAKES TO DO A PARTICUL AR WORK-FOR A PRICE. NO SUCH CONTRACT IS ENVISAGED IN THIS AGREEMENT. THIS AGREEMENT ENVISAGES PURCHASE OF ITA NOS.1485 - 1 487/B/17 14 SPECIFIED INTERMEDIATE SITES AT A PRICE AFTER SRI L AKSHMAN COMPLETES THE JOB OF FORMATION OF A LAYOUT EITHER I NFTI1 OR IN PART. WE ACCORDINGLY HOLD THAT THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX IN THIS REGARD. 3.5.6 WE FIND THAT REVENUES CONTENTION THAT THE AF ORESAID JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF KARNATAKA STATE JUDICIAL DEPARTMENT EMPLOYEES HOUSE BUILDING CO-OPE RATIVE SOCIETY LTD., (SUPRA) IS DISTINGUISHABLE FROM THE CASE ON H AND HAS ALSO BEEN CONSIDERED ON SIMILAR FACT SITUATION, BY CO-ORDINAT E BENCHES OF THIS TRIBUNAL IN THE CASES OF KARNATAKA STATE CO-OPERATI VE SUBHADRANNA HOUSING FEDERATION LTD. (ITA NOS.1301, 1307 TO 1313 /BANG/2015), RAILWAY HOUSE BUILDING CO-OPERATIVE SOCIETY (ITA NO S.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 AGREE MENTS WERE SIMILAR TO THOSE OF THE ASSESEE IN THE CASE ON HAND AND THE VARIOUS CO-ORDINATE BENCHES OF THIS TRIBUNAL AFTER EXAMINING THE SAME H AS APPLIED THE RATIO OF THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF KARNATAKA STATE JUDICIAL DEPARTMENT EMPLOYEES HO USE BUILDING CO-OPERATIVE SOCIETY LTD., (SUPRA) AND HAVE HELD TH AT THERE WAS NO REQUIREMENT FOR DEDUCTION OF TAX AT SOURCE U/S 194C OF THE ACT. RESPECTFULLY FOLLOWING THE RATIO OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF KARNATAKA STATE JUDICIAL ITA NOS.1485 - 1 487/B/17 15 DEPARTMENTAL EMPLOYEES HOUSE BUILDING SOCIETY LTD., (SUPRA) AND OF THE CO-ORDINATE BENCHES OF THIS TRIBUNAL IN THE CAS ES OF KARNATAKA STATE CO-OPERATIVE SUBHADRANNA HOUSING FEDERATION L TD., (SUPRA), RAILWAY HOUSE BUILDING CO-OPERATIVE SOCIETY LTD, (S UPRA), KAUTILYA HOUSE BUILDING CO-OPERATIVE SOCIETY LTD., (SUPRA), KARNATAKA LEGISLATURE SECRETARIAT EMPLOYEES CO-OPERATIVE EMPL OYEES CO- OPERATIVE SOCIETY LTD., (SUPRA) AND IN THE CASE OF TELECOM EMPLOYEES CO-OPERATIVE SOCIETY LTD., (SUPRA). WE FIND NO REAS ON TO INTERFERE WITH OR DEVIATE FROM THE VIEW TAKEN IN THESE DECISI ONS WHICH HAVE BEEN RENDERED ON SIMILAR FACTS AND ISSUES AS IN THE CASE ON HAND. WE, THEREFORE, UPHOLD THE IMPUGNED ORDERS OF THE LD CIT (A) DELETING THE DEMANDS RAISED BY THE AO U/S 201(1) AND 201(1A) OF THE ACT. CONSEQUENTLY, THE GROUNDS RAISED BY THE REVENUE (SU PRA), BEING DEVOID OF MERITS, ARE DISMISSED. 4. IN THE RESULT, REVENUES APPEALS FOR ASST. YEARS 2012-13 TO 2014-15 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY, 2018 . SD/- SD/- (LALIET KUMAR) ( JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEM BER BANGALORE DATED : 7/2/2018 VMS ITA NOS.1485 - 1 487/B/17 16 COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRETAR Y, ITAT, BANGALORE.