2016 (9) TMI 794 - AT - Income Tax

Deduction u/s 80P(2)(a)(i) - Held that - We find that a categorical finding has been given by the AO that the assessee is hit by sub-sec.4 of sec.80P of the IT Act and on this actual aspect there is no finding by the ld. CIT(A) that the assessee is not hit by sub-sec.4 of sec.80P of the IT Act 1961 and therefore without a finding for dislodging the objection of the AO regarding the applicability of sub-sec.4 of sec.80P of the IT Act 1961 the order of the ld. CIT(A) is not sustainable. However in the facts of the present case we feel it proper that this matter should go back to the file of the ld. CIT(A) for a fresh decision after giving a clear finding on the factual aspect as to whether sub-sec.4 of sec.80P is applicable to the assessee in the present case or not. Accordingly we set aside the order of the ld. CIT(A) and restore the mater back to the file of the ld.CIT(A) for a fresh decision in the light of above discussion after providing adequate opportunity of being heard to both sides. - Decided in favour of revenue for statistical purposes TDS u/s 194C - Proceedings u/s 201(1) 2.00 Crores to the second party and further payment was to be made in installments. This is true that the land was not owned by the second party at the time of agreement and it was specified in the agreement that the second party was required to acquire the required land and secure either the converted land and secure the approval of the competent authority for use of land for nonagricultural purposes and residential use and also to obtain approval for the layout plan from the competent sanctioning authority and the second party was also required to provide certain specified facilities and amenities in the layout such as wide asphalted roads water and sanitary connections electrification with overhead lines and transformers adequate street lights dedicated Telephone exchange milk booths KPTCL/BESCOM extension counter Police outpost Bus terminus shopping arcades including vegetable market etc. along with overhead tank/sump tank connected to bore wells in order to provide adequate water supply and roadside tree plantation with tree guards etc. but this is also true that the agreement is for purchase and sale of land with specific facilities and it cannot be said that this is works contract. For example if a person A agrees with different person say B to sell and supply certain quantity of specific quality of material at a predetermined price it cannot be said that such agreement is for carrying out a contract and not a contract of purchase and sale simply because the item to be supplied is to be conforming to certain specified quality and other conditions. Hence in our considered opinion in the present case the agreement of the assessee with Shri Lakshman is for purchase of land with some specific facilities and it is not a contract requiring deduction of TDS u/s 194C of the IT Act 1961. Thus proceedings u/s 201(1)( 201(1A) of the IT Act are dismissed. - Decided in favour of assessee

Summary

Issues Involved:
1. Appeal regarding deduction u/s 80P(2)(a)(i) for AY 2011-12.
2. Appeals related to proceedings u/s 201(1) & 201(1A) for AY 2008-09 to 2014-15.

Analysis:

1. Appeal for AY 2011-12 - Deduction u/s 80P(2)(a)(i):
- The Revenue challenged the CIT(A)'s order allowing deduction u/s 80P(2)(a)(i) without addressing the applicability of sub-sec.4 of sec.80P of the IT Act.
- The AO found the assessee ineligible for deduction under sec. 80P due to being a cooperative society not falling under specific categories.
- The ITAT observed the absence of a finding by the CIT(A) on the applicability of sub-sec.4 of sec.80P and remanded the matter for a fresh decision.
- The appeal of the Revenue was allowed for statistical purposes.

2. Appeals for AY 2008-09 to 2014-15 - Proceedings u/s 201(1) & 201(1A):
- The Revenue raised common grounds challenging the CIT(A)'s reliance on specific judgments and interpretation of contractual elements.
- The Revenue contended that the agreements involved procurement of land and developmental works, not qualifying as contracts requiring TDS deduction.
- The AR of the assessee supported the CIT(A)'s order citing precedent judgments in favor of the assessee.
- The ITAT upheld the CIT(A)'s decision, emphasizing the nature of the agreements as land purchase with specific facilities, not constituting works contracts.
- Relying on the judgments of the Hon'ble Karnataka High Court, the ITAT dismissed all seven appeals of the Revenue under proceedings u/s 201(1) & 201(1A) for the respective years.
- The combined result concluded with one appeal allowed for statistical purposes and the remaining seven appeals dismissed.

In conclusion, the ITAT remanded the appeal for AY 2011-12 back to the CIT(A) for a fresh decision on the deduction u/s 80P(2)(a)(i) issue. For the appeals related to proceedings u/s 201(1) & 201(1A) for AY 2008-09 to 2014-15, the ITAT upheld the CIT(A)'s decision based on the nature of the agreements and precedent judgments, dismissing all seven appeals of the Revenue.