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TMI Blog2015 (6) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... )-XVI, New Delhi is bad in law and wrong on facts. 2. That on the facts and circumstances of the case, the Ld. Commissioner of Income-tax (Appeals)XVI erred in law in upholding the action of the Assessing Officer in making disallowance u/s 40(a)(ia) of the Income-tax Act, 1961 amounting to Rs. 3,20,47,734/- paid by the assessee to the consolidator for transfer of rights. 2.1 That on the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals)-XVI erred in law in holding that payment made by the appellant to consolidator is in the nature of commission / brokerage / fees for services on which TDS was required to be deducted. 3. That on the facts and circumstances of the case, the Ld. Commissioner of Income Tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 194C of the Act. It was submitted that this issue had come up in various cases where the Hon'ble ITAT had decided the same in favour of assessee. Ld. A.R. placed his reliance on the following case laws: i) Finian Estate Developers Pvt. Ltd. Vs ITO 142 TTJ 545 ii) Zebina Real Estate Pvt. Ltd. & Zenobi Builders & Constructions Pvt. Ltd. in I.T.A.No. 1429 and 1430/Del/.2011. iii) M/s. Ethan Estate Developments Pvt. Ltd. in I.T.A.No. 1952/Del/2011 iv) M/s. Red Topaz Real Estate Pvt. Ltd. in I.T.A.No.1501/Del/2011. v) M/s. Fullbright Builders & Developers Pvt. Ltd. in I.T.A.No. 1954/Del/2011. vi) M/s. Penthea Builders & Developers Pvt. Ltd. in I.T.A.No. 1951/Del/2011. 3. Ld. A.R. further submitted that the lead case decided by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idator was on principal to principal basis. The assessee had paid commission to M/s. Vikram Electric Equipments (P) Ltd. for procuring land in and around Gurgaon and the A.O. held that the payment represented the commission for purchase of land and, therefore, was liable for TDS which the assessee had not done and therefore he made disallowance u/s 40(a)(ia) of the Act. We find that in a series of cases as relied upon by Ld. A.R., the payment to Vikram Electric & Equipments Pvt. Ltd. under similar facts and circumstances has been held to have been made on principal to principal basis and, therefore, the Tribunal has held that there was no requirement for TDS. For the sake of convenience the findings of the Tribunal in I.T.A. No. 2361 and 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Electric Equipment P. Ltd. in the lands transferred to the assessee and was not toward any services rendered. As a consolidator, Vikram Electric Equipment P. Ltd. was to contact the local farmers in and around Gurgaon, who were willing to sell their land. Vikram Electric Equipment P. Ltd. was making payments from its account to the farmers and thereto have certain rights in the land. On the ultimate transfer of land to the assessee through Vikram Electric Equipment P. Ltd., the final payment was to be made to the farmers. Towards the right of Vikram Electric Equipment P. Ltd., 2% of the cost of land (in some cases, even a higher amount0 was to be paid to Vikram Electric Equipment P. Ltd., as mutually agreed. This was the mutually agreed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to play as a consolidator, since the assessee required contiguous land holdings in order to develop a colony. In case any land which was agreed to be acquired by Vikram Electric Equipment P. Lt. was not found to be suitable, it was Vikram Electric Equipment P. Ltd. which would have to bear the consequences, indicating that Vikram Electric Equipment P. Ltd. Was not acting as an agent on behalf of the assessee, but was working on a principle to principle basis, independently. 26. The stand of the Department, on the other hand, has been that MOU signed by the assessee and Vikram Electric Equipment P. Ltd. lays down that Vikram Electric Equipment P. Ltd. was acting as an agent of the assessee, rendering services, for which, the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as transacting on a principle to principle basis and it cannot be said that the payment was made by the assessee to Vikram Electric Equipment P. Ltd. for rendering of any service. The provisions of section 194H of the Act are, therefore, not at all applicable. 30. Moreover the amount paid to Vikram Electric Equipment P. Ltd. was duly reflected by the assessee in the purchases closing stock. No sales had been made during the year under consideration. It has not been shown to be otherwise. In such a scenario, in our considered opinion, no disallowance is called for. 31. Further still, the chart at page 16 of the assessee's paper book shows that almost 2% of the sale value was being paid by the assessee to Vikram Electric Equipment P. Ltd. a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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