TaxTMI 
TaxTMI 
2026 (9) TMI 131
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....ult' u/s. 201(1)/201(1A) of the Act on account of non-deduction of TDS u/s 194C of the Act by the Deductor Company on EDC payments made to HUDA. 2. On the facts and in the circumstances of the case, the Addl./JCIT (A)-8, Mumbai has failed to appreciate that External 2 Development Charges (EDC) paid by assessee to HUDA are liable for deduction of TDS u/s 194C of the Income Tax Act, 1961. 3. On the facts and in the circumstances of the case, the Addl./JCIT (A)-8, Mumbai has failed to consider the judgment of the Hon'ble Delhi High Court in the case of M/s Puri Construction Private Limited Vs. Addl. CIT & Ors., 159 taxmann.com 444 (Delhi) [2024] 462 ITR 326 (Delhi) in which the Hon'ble Court has held that EDC payments by a Developer to HUDA would be subject to TDS u/s 194C of the Act. 4.On the facts and in the circumstances of the case, and in view of the CBDT Circular No. 9/2024 dated 17.09.2024 r/w the Para 3(1)(i) of CBDT Circular No. 05/2024 dated 15.03.2024, the case falls under exceptions given therein and thus appeal is being preferred in this case. 5. That, the appellant craves to add, amend, modify and delete any of the grounds ....
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.... the AO to the assessee. The assessee participated in the proceedings u/s 201(1) and 201(1A) conducted by the AO. The assessee denied to have made payments of Rs. 1,15,28,550/- to HUDA(now HSVP). The assessee contended that it only made payments of Rs. 18,00,000/- related to EDC charges to DTCP on 23.07.2015 by way of demand draft debited from its bank account on 20.07.2015. The assessee contended that the remaining payments of Rs. 1,15,28,550/- does not belong to it. The assessee enclosed bank statement for the financial year 2015-16 before the AO to submit that no such payments to the tune of Rs. 1,15,28,550/- were made by it. The assessee submitted that it has only one bank account with HDFC bank bearing number 01712560013748. It submitted that TDS is not applicable on EDC paid by it to HUDA/DTCP. It submitted that HUDA is collecting agency collecting EDC charges on behalf of DTCP. The AO after detailed analysis and deliberations observed that the assessee has made payments of Rs. 1,33,28,550/- to HUDA/IDF(DTCP) towards EDC/IDC without deducting income-tax at source(TDS), while as per Section 194C of the 1961 Act, the assessee ought to have deducted TDS@2% u/s 194C of the 1961 A....
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....4C of the 1961 Act. The ld. Sr. DR also relied upon the order of the Delhi Tribunal in the case of Ireo Grace Realtech Private Limited in ITA nos. 24 & 28/Del/2025, dated 18.08.2025, wherein the Delhi Tribunal relied on judgment and order of Hon'ble Delhi High Court in the case of Puri Constructions(supra), and held that EDC payments are subject to TDS u/s 194C of the 1961 Act. The ld. Sr. DR also relied upon order of the Delhi Tribunal in the case of Trehan Promoters and Builders Private Limited v. ITO, in ITA No. 2058/Del/2025, vide order dated 29.10.2025, wherein similar view was taken by Delhi Tribunal that EDC is liable to TDS u/s 194C of the 1961 Act. 5.2 The ld. Counsel for the assessee submitted that the assessee has not only paid EDC but also administrative charges. The assessee has filed paper book containing 15 pages, which is placed on record in file. It was submitted that the assessee was granted license no. 62 of 2009 dated 03.11.2009 valid upto 2.11.2013, by DTCP, Haryana to setting up a commercial colony at Village Ajronda, Sector 12, District Faridabad, Haryana on land admeasuring 1.725 Acres(PB/Page 1-3). It was submitted that there was a new policy announced b....
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....e Hon'ble Supreme Court by aggrieved party. It was submitted that for remaining amount of Rs. 1,15,28,550/- paid by the assessee towards administrative charges as detailed above, the same was not subject to TDS under the provisions of Chapter VII-B of the 1961 Act, and the assessee be granted relief to that extent. 6. We have considered rival contentions and perused the material on record. The facts in brief are narrated in preceding para's of this order and are not repeated. It is observed that so far as EDC of Rs. 18,00,000/- paid by the assessee to HUDA/HSVP, on 23.07.2015, the assessee has itself contended that in view of binding judgment and order of Hon'ble Delhi High Court (Jurisdictional High Court) in the case of Puri Constructions(supra), the same may be decided against assessee and in favour of Revenue. That being so, Respectfully following the aforesaid judgment and order of Hon'ble Delhi High Court in the case of Puri Constructions(supra), we hold that the assessee has failed to deduct income-tax at source u/s 194C of the 1961 Act, while making payment of EDC to HUDA(HSVP) to the tune of Rs. 18,00,000/- on 23.07.2015. Thus, this issue is decided against the assessee....