2010 (3) TMI 1211 - HC - Income Tax

Summary

Issues Involved:
The issues involved in this case are:
1. Whether the contract for purchasing lands from sites attracts provisions of Section 194C and 201(1) of the Income Tax Act, and if interest under Section 201(1A) is leviable.
2. Whether the agreement for purchasing sites amounts to a contract under Section 194C of the Act.

Judgment Details:
1. The revenue appealed against the orders of the Income Tax Appellate Tribunal, challenging the applicability of tax deduction at source under Section 194C and 201(1) of the Act in a contract for purchasing lands from sites. The Tribunal held that the contract between the assessee and Mr. Lakshman did not attract these provisions. The High Court noted that the assessee had only agreed to purchase sites from a vendor, and if any advance sale consideration was paid, the assessee was not required to deduct tax at source. The responsibility for tax payment lay with the seller. The Court ruled in favor of the assessee, dismissing the appeal.

2. The Tribunal also considered whether the agreement between the assessee and Mr. Lakshman constituted a contract under Section 194C of the Act. It was argued that since Mr. Lakshman was providing completed sites to the assessee, it did not amount to a contract for execution of work. The Court's decision in this regard was not explicitly mentioned in the summary provided.