Section 40(a)(ia) Disallowance Unwarranted: Section 194C TDS Not Applicable to EDC Payments

DCIT Vs DLF Limited (ITAT Delhi)

ITAT Delhi held that TDS provision under Section 194C of the Act are not attracted on EDC payments since EDC payments are not in nature of rent. Accordingly, disallowance of 30% of these payment u/s. 40(a)(ia) unwarranted. Accordingly, appeal of revenue dismissed.

Facts- The assessee company, engaged in the business of real estate, having multiple ongoing projects of construction and also selling upon the plots of land. The case of the assessee was selected for scrutiny assessment through CASS.

The said assessment was

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