The Assessing Officer had held that tax was liable to be deducted at source under section 194-I of the Act, and he had also proceeded to analyse the section and hold that external development charges were in the nature of rent. He had, in addition, also applied the rate of 10 per cent. for assessing the assessee’s liability. Court held that the approach of the Revenue was flawed. The contention that the findings of the Assessing Officer regarding the nature of the external development charges as well as at the provisions referred by him for determining the assessee’s liability were not material, was erroneous. The orders passed by the Assessing Officer raising a demand under section 201(1) and (1A) of the Act were liable to be quashed.