TMI Blog2023 (4) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... in default alleging the non-compliance. Also see case of Delhi Development Authority [ 1995 (1) TMI 126 - ITAT DELHI] [ Thus we reach to a logical conclusion that the impugned payment is nothing but compensation/damages paid by the assessee to its allottees which cannot be tagged as interest u/s. 2(28A) - TDS provision of section 194A of the Act is not applicable towards such payment. Assessee cannot be treated as assessee in default for noncompliance of TDS provisions on account of such payments. Appeal of the assessee is allowed. - ITA No. 6205/Del/2012 - - - Dated:- 11-4-2023 - SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA , ACCOUNTANT MEMBER For the Assessee : Shri Manoj Kumar , CA For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 was set aside and appeal was restored for a fresh hearing. In pursuance thereto the appeal of the assessee is heard and being adjudicated by this order. 4. The Ld. AR submitted that the Ld. CIT(A) has erred in law and on facts in confirming the action of the AO in treating the assessee in default as per section 201(1)/201(1A) of the Income Tax 1961 (hereinafter for short the Act). The learned AR further submitted that the Ld. CIT(A) has further heard in confirming the action of the AO for treating the in default on account of non-deduction of TDS u/s. 194A of the Act for Rs. 43,03,610/-. Further placing vehement reliance on the judgement of Hon ble Calcutta High Court vs PCIT West Bengal Housing Infrastructure Development Corporation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in default under the provision of Act and the AO was right in charging amount of Rs. 43,03,610/-. 6. On careful consideration of rival submissions first of all we note that the assessee is consistently submitting that the assessee is a builder and the assessee has taken registration amount from applicants from allotment of plots/flats for its upcoming projects at Ghaziabad but could not deliver the promises of allotment of plot/flat on time to the applicants/allottees. It was also a factual position stated by the assessee that due to said delay the assessee has to pay compensation/damages for non-compliance to the respective applicants/allottees. It was also explained that till September 2009 the assessee deducted TDS u/s. 194A o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At this juncture, we find it appropriate to take respectfully cognizance of judgment of Hon ble High Court of Calcutta in the case of PCIT vs. West Bengal Housing Infrastructure Development Corporation reported as 413 ITR 82 (Calcutta) wherein the Their Lordship, under identical facts and circumstances held that the payment for delayed allotment of plot of land by the builder/developer is not interest u/s. 2(28A) of the Act since there was neither any borrowings of money nor was there incurring of debt on part of assessee therefore TDS provision of section 194A of the Act cannot applied to such a situation to treat the assessee as assessee in default alleging the non-compliance. 9. The similar view has been expressed by the co-ordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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