2003 (12) TMI 270 - AT - Income Tax

Summary

Issues:
Dispute over demand raised under s. 201(1)/194-I of the IT Act for asst. yr. 1996-97.

Analysis:
The AO raised a demand of Rs. 72,000 on the assessee for not deducting tax at source under s. 194-I based on a survey alleging non-issuance of TDS certificate to the landlord. The CIT(A) upheld the demand stating service charges were akin to rent. The ITAT noted the tenancy agreement with landlords and service agreement with service providers were distinct. The service charges were for services unrelated to the building's use, making them not rent under s. 194-I. The payment for rent was only Rs. 5,400, below the threshold. Thus, the ITAT canceled the orders under s. 201(1) r/w s. 194-I, allowing the appeal.