Appeal details
Counselvise Citation
[2009] 114 COUNSELVISE.COM (IT) 9526 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-08-2009
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
13-08-2009
Assessment Year
2008-2009
Appeal Filed On
08-04-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE A BENCH, BANGALORE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI A. MOHAN ALANKAMONY, AM ITA NOS.299 TO 300(BANG.)/2005 (ASSESSMENT YEARS : 2007-08 & 2008-09) THE DEPUTY COMMISSIONER OF INCOME-TAX (TDS), CIRCLE-18(2), BANGALORE APPELLANT VS THE ACCOUNTANT GENERALS OFFICE HOUSING CO-OP. SOCI ETY LTD., BANGALORE RESPONDENT AND ITA NOS.768 TO 771(BANG.)/2009 (ASSESSMENT YEARS: 2007-08 & 2008-09) THE DEPUTY COMMISSIONER OF INCOME-TAX (TDS), CIRCLE-18(2), BANGALORE APPELLANT VS THE ACCOUNTANT GENERALS OFFICE HOUSING CO-OP. SOCI ETY LTD., BANGALORE RESPONDENT REVENUE BY SMT. JACINTA ZIMIK VASHAI ASSESSEE BY : SHRI A.S.R.S.S.SIVA PRASAD O R D E R PER BENCH: ALL THESE APPEALS PERTAIN TO THE SAME ASSESSEE FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09. SO THEY ARE BEING DISPO SED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. AT THE TIME OF HEARING, IT WAS POINTED OUT THAT THE ISSUE IN ITA NOS.299 & 300(B)/09 HAS BEEN TAKEN CARE OF IN THE S UBSEQUENT FOUR ITA NOS.299 & 300 AND 768 TO 771(B)/09 2 APPEALS, SO THEY GO INFRUCTUOUS, ACCORDINGLY THE SA ME ARE DISMISSED BEING INFRUCTUOUS. ITA NO.768(B)/09 3. THE REMAINING FOUR APPEALS ARE ARISING FROM THE CONSOLIDATED ORDER OF CIT(A) DATED 30-01-2009. THE BRIEF FACTS OF THE CASE ARE THAT THE DCIT(TDS) CONDUCTED SURVEY U/S 133A IN THE PREMISE S OF M/S PRESIDENCY GROUP MAHALAKSHMI LAYOUT ON 30-01-2008. DURING THE SURVEY, IT WAS FOUND THAT THE ACCOUNTANT GENERALS OFFICE CO-OP. S OCIETY LTD., HAD PAID THE FOLLOWING AMOUNTS TO THE FOLLOWING CONCERN AS U NDER: SL.NO NAME OF THE FIRM FINANCIAL YEAR AMOUNT PAID IN RS. DEMAND IN RS. 1 SANGHAMITHRA FY: 2006-07 6,63,54,600 17,69,932 FY: 2007-08 55,53,000 1,21,917 2 KSHEMA RESIDENCY FY: 2006-07 7,25,00,000 19,69,67 1 4. THE AO SUMMONED THE PRESIDENT OF THE SOCIETY CA LLING FOR INFORMATION AND THE DETAILS OF PAYMENT MADE TO ABOV E SAID SANGHAMITHRA & KSHEMA RESIDENCY. IN RESPONSE, SRI KESHAV DAS, VI CE PRESIDENT AND SRI SRINATH, SECRETARY APPEARED AND SUBMITTED THE NECES SARY DETAILS WITH REGARDS TO PAYMENT PARTICULARS, MOUS ETC., AS PER MOU, THE FIRST PARTY(ASSESSEE) PAID RS.3.00 CRORES BY CHEQUE NO.85 6215,856216 & 2077573 DATED 14-04-2006 AT THE TIME OF ENTERING TH E MOU. THE REMAINING 25% OF ADVANCE SALE CONSIDERATION WAS TO PAYABLE ON OR BEFORE 20-05-2006 ITA NOS.299 & 300 AND 768 TO 771(B)/09 3 AND BALANCE 75% OF SALE CONSIDERATION AMOUNT SHALL BE AFTER THE APPROVAL OF THE LAYOUT BY BMRDA. THE SECOND PARTY WAS RESPONSIB LE FOR THE TITLE OF THE PROPERTY, SETTLE COURT CASES, SURVEY, CONVERSION OF AGRICULTURAL LAND NOR NONAGRICULTURAL RESIDENTIAL PURPOSE BY THE CONCERNE D AUTHORITIES. THE SECOND PARTY WAS SUPPOSED TO GET REGISTERED THE SIT ES IN THE NAME OF THE FIRST PARTY OR ITS MEMBERS. IT WAS ALSO AGREED THA T THE LAYOUT WOULD BE DEVELOPED AFTER THE REGISTRATION OF THE SITES AS PE R BMRDA NORMS. IT WAS FOUND THAT THE SOCIETY HAS ENTERED INTO AGREEMENT O F CONTRACT FOR DEVELOPMENT AND FORMING RESIDENTIAL LAYOUTS. ACCOR DING TO AO, THIS AMOUNTED TO CONTRACT AND ANY PAYMENT MADE ATTRACTS PROVISION OF SECTION 194C. THUS, THE SOCIETY FAILED TO DEDUCT TDS ON RS .719,07,600/- & RS.725,00,000/- TOWARDS PROJECTS OF SANGAMITHRA AND KSHEMA RESPECTIVELY. 5. THE ASSESSEE WAS ASKED TO EXPLAIN THE REASONS F OR NON-DEDUCTION. THE PRESIDENT ON BEHALF OF THE ASSESSEE SUBMITTED T HAT THE PAYMENT MADE TILL DATE IS ONLY TOWARDS THE COST OF LAND AND DEVE LOPMENT WORK WHICH WAS NOT YET STARTED. HENCE, TAX WAS NOT DEDUCTED AT SO URCE. THE AO CONCLUDED THAT THE PAYMENTS MADE BY THE SOCIETY WOULD BE COVE RED UNDER THE PROVISIONS OF SEC.194C FOR THE PURPOSE OF TDS AND R AISED A DEMAND OF RS.38,61,520/- AS TDS ON PAYMENTS MADE TO THE PROJE CTS OF SANGAMITHRA AND KSHEMA RESIDENCY. THE MATTER WAS CARRIED BEFOR E THE FIRST APPELLATE AUTHORITY WHO AFTER TAKING INTO CONSIDERATION THE S UBMISSIONS MADE ON BEHALF OF ASSESSEE DECIDED THE ISSUE IN FAVOUR OF A SSESSEE. ITA NOS.299 & 300 AND 768 TO 771(B)/09 4 6. WE FIND HELD THAT AS PER MOU, THE SOCIETY AGREE D TO PURCHASE SITES FOR ITS MEMBERS FROM M/S SANGAMITHRA AND M/S KSHEMA RESIDENCY AFTER FULFILLING CERTAIN SPECIFICATION BEING CONVERSION O F AGRICULTURAL LAND FOR NON- AGRICULTURAL RESIDENTIAL PURPOSES ETC., BY PAYING S TAMP DUTY, REGISTRATION ETC., ACCORDING TO CIT(A), IT IS CONTRACT FOR SALE TRANSFER OF PROPERTY AND NOT A CONTRACT FOR WORK AND LABOUR. THE DEVELOPMENT OF S ITE BY DEVELOPER WAS INCIDENTAL AND NO ONE WILL PURCHASE THE UNDERDEVELO PED OR UNAPPROVED LAYOUTS. THERE IS NO INVOLVEMENT OF EXECUTION OF WO RK BECAUSE SALE COULD NOT BE COMPLETED. SO THERE IS NO OCCASION FOR CONV ERSION OF LAND AND THE LIABILITY OF EXPENSES DID NOT ARISE AT ALL. IT IS A CASE OF CONTRACT FOR PROCUREMENT OF PROPERTY WHICH IS OUTSIDE THE PURVIE W OF SEC.194C. THE STAND OF THE REVENUE IS THAT AGREEMENT ENTERED INTO BY THE AUDITORS GENERALS CO-OPERATIVE SOCIETY LTD.,( AGO SOCIETY L TD.,) WITH SANGAMITHRA AND KSHEMA RESIDENCY ARE AGREEMENT FOR WORK AND NOT SALE. THERE NOTHING ON RECORD TO SUGGEST TRANSFER OF LAND IN QUESTION, SO THERE IS NO OCCASION FOR DEVELOPMENT OF SAME. THE ASSESSEE HAS MADE ADVANCE PAYMENT TO SANGAMITHRA AND KSHEMA RESIDENCY WHO WERE SUPPOSE T O PROCURE THE LAND FOR ASSESSEE. THOSE PARTIES HAVE ENTERED INTO AGRE EMENT WITH ASSESSEE FOR PROCUREMENT, CONVERSION FOR AGRICULTURAL LAND FOR N ON AGRICULTURAL PURPOSES AND DEVELOPED THE LAND AS PER THE APPROVAL BY BMRDA . THE SECOND PARTY I.E. SANGAMITHRA AND KSHEMA RESIDENCY HAVE AGREED F OR DEVELOPMENT OF LAND IN QUESTION AS PER PROPOSED LAYOUT PLAN FOR TH E SAME AND SUCH PAYMENTS ARISING OUT OF THE COMPOSITE CONTRACT DOES NOT ATTRACTS PROVISIONS ITA NOS.299 & 300 AND 768 TO 771(B)/09 5 OF SEC.194C AND THE ASSESSEE WAS NOT LIABLE TO DEDU CT TAX AT SOURCE. IT IS NOT IN DISPUTE THAT NO LAND COULD BE PURCHASED SO T HERE IS NO QUESTION OF DEVELOPMENT THEREON. IN FACT, THE ADVANCE AMOUNT I N QUESTION HAS BEEN GIVEN MAINLY FOR PROCUREMENT OF LAND SO THERE WAS N O OCCASION TO DEDUCT THE TAX AT SOURCE FOR THE SAME. ACCORDINGLY, THE C IT(A) WAS JUSTIFIED TO DELETE THE TDS DEMAND IN QUESTION. THE SAME IS UPH ELD. THE ISSUE OF INTEREST THEREON IS CONSEQUENTIAL. 7. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE (A. MOHAN ALANKAMONY) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: BANGALORE DATED: AM * COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF(BLORE) 7. GF(DELHI AR, ITAT, BANGALORE
