2023 (5) TMI 28 - AT - Income Tax

Short deduction of tds - TDS u/s 194C OR u/s 194-I - CAM charges paid by the assessee - HELD THAT - No hesitation to hold that the CAM charges paid by the assessee did form part of the actual rent payment which was paid to the property owner by the assessee company. In the present case, the facts and circumstances of the payment of CAM charges are quite similar to the facts and circumstances of the above two cases i.e., Kapoor Watch Company Pvt. Ltd. 2021 (1) TMI 209 - ITAT DELHI and Connaught Plaza Restaurants P. Ltd. 2022 (1) TMI 409 - ITAT DELHI Therefore, we hold that CAM charges paid by the assessee were liable for deduction at source @ 2% i.e., u/s 194C - Decided in favour of assessee.

Summary

Issues involved: The sole issue in this appeal is the confirmation of the demand of TDS plus interest amounting to Rs. 2,20,319/- due to short TDS deduction.

Summary of Judgment:

Issue 1: TDS on CAM Charges
- The assessee argued that TDS should be deducted at 2% u/s 194C, not 10% u/s 194-I for CAM charges.
- The AR highlighted that rent and CAM charges were paid to different entities within the Ambience Group.
- The AO insisted that 10% TDS was applicable to CAM charges under 194-I.
- The ITAT Delhi referred to previous cases and ruled that CAM charges are not rent but contractual payments for services, thus subject to 2% TDS u/s 194C.
- The ITAT set aside the orders, directing the AO to delete the addition made in the assessee's hands.

Conclusion: The appeal was allowed in favor of the assessee, holding that CAM charges were liable for 2% TDS under section 194C, not 10% under section 194-I.