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TMI Blog2024 (1) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue has taken common grounds of appeal in both the assessment years. For the sake of brevity, we are reproducing Grounds of appeal taken by the Revenue in AY 2019-20 as under :- "1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) was justified in not appreciating the fact that decision of Hon'ble ITAT in the judgement relied upon that the assessee was not liable to deduct tax at source on External Development Charges (EDC) is in contravention to CBDT's Office Memorandum vide F.No. 370133/37/2017-TPL dated 23.12.2017, wherein, it has been clearly mentioned that the TDS provisions would applicable on EDC payable to HUDA. 2. Whether on the facts and in the circumstances of the case and in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the order u/s 201(1) and 201(1A) of the Act. In the present appeal the appellant has raised four grounds of appeal. All the grounds are related to raising of demand u/s 201(1) and 201(1) of :- A) Rs. 18,40,610/- for its failure to deduct TDS u/s 194C on EDC/IDC charges of Rs. 6,34,69,312/- paid to HUDA (Rs. 12,69,386/- u/s 201 and Rs. 5,71,224/- u/s 201(1A); B) Rs. 88,88,451/- for its failure to deduct TDS u/s 194C on EDC/IDC charges of Rs. 5,69,77,249/- paid to HUDA (Rs. 56,97,725/- u/s 201 and Rs. 31,90,726/- u/s 201(1A). 7. According to the Assessing Officer, the appellant was required to deduct tax at source (TDS) on the payment of External Development Charges and Internal Development Charges (here-in-after referred as "EDC/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date on which such tax was deducted to the date on which such tax is actually paid, the demand raised and payable by the appellant u/s 201(1) and interest u/s 201(1A) of the Act, which as follows :- S. No. EDC amount Paid (in Rs.) TDS Deductible @ 2% u/s 194C (in Rs.) Date of Payment Delay in months Interest u/s 201(1A) @ 1% p.m. (in Rs.) Total liability 1 6,34,69,312 12,69,386 31.03.2019 45 5,71,224 18,40,610 10. Further, appellant had made payment of Rs. S,69,77,249/ as "Interest on EDC & IDC charges" without deducting TDS on it during the period under consideration. The Assessing Officer had held that the appellant was liable to deduct TDS @10% on 'Interest on EDC /IDC charges paid as per section 194A of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, private builder is liable to deduct tax at source on such payments and EDC ought to be subjected to TDS by payers @2% u/s 194C of the Act and interest thereon@ 1% u/s 201(1A) of the Act. Further, the appellant paid interest component on EDC/IDC charges was also liable to deduct TDS @ 10% on such payments as per provisions of section 194A of the Act. 13. The appellant has claimed that EDC is determined and levied by Directorate of Town and Country Planning (DTCP) which is a department of state Government of Haryana and therefore, TDS provisions should not apply relying on the provision of Section 196 of the Act. 14. It is a matter of fact that the HUDA is engaged in acquiring land, developing it and finally handing over it for a pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the 'Notes' to the Accounts Forming part of the Balance Sheet, it has been shown that EDC has been received for execution of various external development works and as and when the development works are carried out, the EDC's liabilities are reduced accordingly. It is also not in dispute that HUDA is engaged in acquiring land, developing it and finally handing it over for a price. It is also not in dispute that EDC is fixed by HUDA from time to time. However, the fact of the matter remains that payment has been made to HUDA through DTCP which is a Government Department and the same is not in pursuance to any contract between the assessee and HUDA. Thus, the payment of EDC is not for carrying out any specific work to be done by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant but rather Haryana Government which levies these charges for carrying out external development and engages the services of HUDA for execution of the work. Therefore, in view of the above judgement, the appellant was not required to deduct tax at source at the time of payment of EDC as the same was not out of any statutory or contractual liability towards HUDA and, therefore, the impugned addition is not sustained. 17. A similar view has been taken by the Hon'ble ITAT Delhi in the cases of Santur Infrastructure Pvt. Ltd. vs. ACIT in ITA 6844/Del/2019 vide order dated 18.12.2019, Sarv Estate Pvt. Ltd. vs. JCIT in ITA No.S337 &S338/Del/2019 vide order dated 13.09.2019 and Shiv Sai Infrastructure (Pvt.) Ltd. vs. ACIT in ITA NO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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