TMI Blog2023 (11) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ired 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. Decided in favour of assessee. - Shri Kul Bharat, Judicial Member And Shri M.Balaganesh, Accountant Member For the Assessee : Ms. Gunjan Jain, CA For the Revenue : Shri Subhra Jyoti Chakraborty, CIT-DR ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.2804/Del/2022 for A.Y. 2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-23, Delhi in appeal No.23/10882/2014-15 dated 06.09.2022 (hereinafter referred to as ld. CIT(A) in short) against the order of assessment passed u/s. 201(1)/201(1A) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avail in the present case as subject matter of appeal in those cases before the Hon'ble Tribunal was penalty u/s 271C of the I.T. Act. 4. 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. 3. We have heard the rival submissions and perused the materials available on record. We find that the only effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the meaning of section 194C of the Income Tax Act, 1961. 7 In the case of the appellant, it has been stated that the appellant has paid external development charges for taking license for development of residential, commercial colony in Haryana in the F.Y. 2014-15. Detail of external development charges including interest paid in the financial year 2014-15 is as under: Date of Payment Amount paid/ Credited TDS deducted TDS deductible @2% u/s 194C TDS deductible @10% u/s 194A 23.06.2014 16,00,00,000/- NIL 32,00,000/- 31.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t HUDA is a taxable entity and its business income is taxable. The AO has contended that EDC is arising out of an agreement which is in the nature of service contract wherein colonizers pay EDC to HUDA for creation, development and maintenance of urban infrastructure named as EDWs. HUDA is rendering a service to colonizers for which EDC is paid. Therefore, EDC ought to be subject to TDS u/s 194A 194C of the Act @ 10% and 2% respectively. 11. It is a matter of fact that EDC is paid to HUDA to commercially exploit the land owned by it. It has been submitted during the appellate proceedings that there is no privity of contract between HUDA authority and appellant company, there is agreement between Haryana Government and appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 DTC 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 HUDA for and on behalf of the assessee but rather DCP which is a Government Department which levies these charges for carrying out external development and engages the services of HUDA for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 14. 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.5337 5338/Del/2019 vide order dated 13.09.2019 and Shiv Sai Infrastructure (Pvt.) Ltd. vs. ACIT in ITA No.5713/Del/2019 vide order dated 11.09.2019. 15. The facts of the case are identical to the case of Perfect Constech Pvt. Ltd. vs. Addl. CIT, Range-76, Delhi (I.T.A No.6907/Del/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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