2024 (8) TMI 1634

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....dated 22 November 2023 and posits the following questions of law for our consideration:- "A. Whether the ld. ITAT erred in deleting the applicability of tax deduction on EDC payment made to HUDA? B. Whether the Hon'ble ITAT erred in not remanding the case back to the AO to decide the applicability of the tax deduction under the provisions of Income-tax Act, 1961 afresh on merits considering the nature of payment made to HUDA?" 2. We find from a reading of the judgment rendered by the Tribunal that it has essentially held that External Development Charges ['EDC'] charges would not be subject to a deduction of tax at source. 3. That issue stands conclusively answered by us in our decision rendered in Puri Constructions....

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....e arrangement and conduct of parties led the Supreme Court to hold and observe that since the hiring of the sub-contractor was only for the purposes of fulfilling the principal contract which the appellant had with the specified person, the provisions of Section 194-C were satisfied. It was thus the conduct of parties which led to the Supreme Court coming to the conclusion that all essentials of the creation and existence of a contract existed. 60. In the facts of the present case, and as we construe the provisions of the HDRUA read along with the rules as also the statutory obligations placed upon HSVP, it becomes apparent that there was in existence an understanding or an arrangement between HSVP and the Government of Haryana for....

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....ble for paying a sum and the contractor as defined in that provision. The existence of a contract is only envisaged to be a factor pertinent to an arrangement which the contractor may have with a specified person. Thus merely because EDC is determined and directed to be paid by the DTCP, the same does not deprive the payment of its intrinsic characteristic, namely, of being a payment made to HSVP. 63. In our considered opinion the fact that EDC is determined, computed or is recoverable by the DTCP is wholly inconsequential since Section 194-C is solely concerned with a payment being made to a contractor who has an arrangement with a specified person. Merely because an exercise of quantification is undertaken by the specified person....