Dismissing the appeal of the revenue the Court held that ; payment for delayed allotment of land by Housing Corp. is not interest since there was neither any borrowing of money nor was there incurring of debt on part of assessee hence not liable to deduct tax at source. Accordingly no disallowance can be made .( AY.2005 -06, 2006 -07)
PCIT v. West Bengal Housing Infrastructure Development Corporation Ltd. ( 2018) 257 Taxman 570 / ( 2019) 306 CTR 601/ 173 DTR 377/ 413 ITR 82 ( Cal) (HC) Editorial: SLP of revenue is dismissed , PCIT v. West Bengal Housing Infrastructure Development Corporation Ltd ( 2019) 263 Taxman 237 (SC)
S. 40(a)(ia): Amounts not deductible – Deduction at source -Interest- Payment for delayed allotment of land by Housing Corp. is not interest since there was neither any borrowing of money nor was there incurring of debt on part of assessee hence not liable to deduct tax at source-No disallowance can be made [ S.2(28A), 194A]