Reproducing a reply posted by CA from Pune in response to discussion on the same topic at the link below which may be useful for further discussions.
https://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17140
Sub: Sale of Under construction flats, whether immovable property
Article has touched upon very important issue that has potential for great trouble for flat buyers and builders.
Here I feel that since sale of under consturction flats, are taxed as Works Contracts under VAT and Service Tax, on the basis that property in goods is transferred as goods while contract is being executed, no scope is left for same sale of goods to be taxed again as sale of immovable property from builder to flat purchaser.
This is because property in building materials is transferred before said goods become immovable as part of the building. Service portion of such works contract also can by no stretch of imagination be conceived to be sale of immovable property.
This leaves only value of land contained in the price of flat, to be liable for being treated as sale of immovable property and new TDS shall be payable only to the extent of land price part of the total flat price.