TaxTMI 
TaxTMI 
2025 (9) TMI 1017
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....5/2019-20 arising out of the appeal before it against the order dated 17.12.2019 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the DCIT, Circle-24(2), Delhi (hereinafter referred to as the Ld. AO). 2. Heard and perused the record. The Assessee company is engaged in the construction of affordable houses and filed the Return of Income (ROI) for the A.Y. 2017-18 on 27.10.2017 declaring loss of Rs. 2,01,38,312/-. During the year under consideration, the Assessee had paid Extra Development Charges (EDC) amounting to Rs. 99,80,000/- to Haryana Urban Development Authority (HUDA) on the basis of the License issued by the Directorate of Town and Country Planning Haryana a wing of Haryana Government (DTCP). T....
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....nd the addition of Rs. 29,94,000/- is illegal and bad in law. Section 40(a)(ia) is not applicable to the facts and circumstances of the case. The addition of Rs. 29,94,000/- is liable to be deleted. 3) That the interpretation adopted by Hon'ble Delhi High Court in the case of M/s Puri Construction is illegal and bad in law and the same should not be followed as many vital aspects have been ignored. 4) That the EDC charges paid to HUDA are further paid to Haryana Government and on such facts and circumstances Section 40(a)(ia) are not applicable. 5) That without prejudice the lower authorities have failed to appreciate the fact that HUDA is also a government authority on which no tax can be charged. 6) Tha....
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....tted that payment to HUDA pursuant to the directions of DTCP are statutory dues/external development charges. These are charges payable under law by the developers to the Government/local authority. Hence, liability to deduct TDS under Section 194A can never arise as this payment cannot by any stretch of imagination by termed as "interest" for invoking Section 194A of the Act. It was contended that EDC is a statutory obligation upon the owner/applicant to pay the proportionate development charges if its external development work is to be carried out by the Government or any other local authority. Thus the nature of EDC being statutory dues cannot be doubted and hence the AO has grossly erred in referring to it as "interest". 4. It comes ....
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..... It submitted by ld. Counsel that in the case of Puri Constructions (P.) Ltd.(Supra) Hon'ble High Court has only adjudicated on the applicability of Section 194C and not on any other provision of law. 7. Now as with regard to applicability of Section 194C of the Act to impugned payments seems to be not at all disputed but the issue is error committed by AO in invoking provisions of Section 194A of the Act. It appears that before the CIT(A) this error was not pointed out in the form of any grounds or by way of any submissions. Assessee was infact contesting on merits alone by relying certain decision of Tribunal in favour of assessee, which were there when appeal was filed before the CIT(A). But subsequently the said decision of Hon'ble ....
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....vii)(b)(ii) of the Act and not u/s 69 of the Act. 11. Further he submitted that where appeal lies before Commissioner of Income Tax (A) against an order of assessment, he can exercise the powers as enumerated u/s 251(l)(a) of the Act i.e. the Id. CIT (A) can confirm, reduce, enhance or annul the assessment but he cannot change the substance of addition. He further submitted that it is pertinent to note that addition of Rs. 1,63,50,103 has been made by Assessing Officer invoking provisions of section 69 of the Act, of which addition to the extent of Rs. 70,00,000/- was deleted by first appellate authority (Although issued direction for assessment in different year), further the addition of Rs. 93,50,103/- (Rs.1,63,50,103 - Rs. 70,00....