9911796707
TMI Blog2022 (5) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in default u/s.201(1), the interest charged by the AO u/s.201(1A) which is consequential in nature is rendered infructuous - Decided in favour of assessee. - ITA No. 56/Bang/2022 - - - Dated:- 29-4-2022 - SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND MS. PADMAVATHY S, ACCOUNTANT MEMBER Assessee by : Smt. Tanmayee Rajkumar, Advocate Revenue by : Shri. Priyadarshini Besaganni, Addl. CIT DR ORDER Per Padmavathy S, Accountant Member The assessee has filed these appeals challenging the order of the CIT(A) NFAC dated 25/11/2021 for the asst. year 2018-19. 2. The issue the assessment year under appeal is the treatment of common area maintenance charges (CAM charges) as rent and applying TDS rates at 10% u/s. 194 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The Learned CIT(A) and Learned AO erred in not complying with the circular issued by the Central Board of Direct Taxes, which clarifies that any routine maintenance charges, which is not technical in nature, will be covered u/s. 194C of the Act. 8. The Learned CIT(A) and Learned AO ought to have appreciated various judicial pronouncements which held that maintenance charges fall under preview of section 194C of the Act. 9. The Learned CIT(A) and Learned AO erred in relying on certain judicial precedents which are distinguishable from the facts of the Appellant's case. 10. The Learned CIT(A) has grossly erred in relying on the CIT(A)'s order in Appellant's own case for AY 2011- 12 without appreciating that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rges. The AO also computed interest u/s. 201(1A) on the tax short deducted. 4. Aggrieved by the order of the AO the assessee preferred an appeal before the CIT(A). The CIT(A) observed that there was a single lease agreement for the premise s rent and the CAM charges and concluded that CAM charges are integral part of the agreement between the assessee and the lessor. The CIT(A) therefore dismissed the appeal of the assessee by confirming that TDS on CAM charges should be done at 10% u/s. 194I of the Act by relying on the earlier year order passed by the CIT(A) in assessee s own case. The CIT(A) also dismissed the claim of the assessee that the assessment order passed by AO was barred by limitation u/s. 201(3) of the Act. 5. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of- (a) two per cent for the use of any machinery or plant or equipment; and (b) ten per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings: Provided that no deduction shall be made under this section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed one hundred and eighty thousand rupees: Explanation.-For the purposes of this section,- (i) rent means any payment, by whatever name called, under any lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Department in the case of Ambience Group (supra) to verify the compliance of the provisions of Chapter XVII-B of the Act. On the basis of the facts that had emerged in the course of the proceedings, it was gathered by the Department that the owners of the malls in addition to the rent had been collecting CAM charges from the lessees on which TDS was deducted @2% i.e u/s.194C of the Act. Observing, that payment of CAM charges were essentially a part of the rent, the AO treated the assessee as an assessee-in-default for short deduction of tax at source u/ss. 201(1)/201(1A) of the Act. On appeal, it was observed by the Tribunal that the CAM charges paid by the assessee did not form part of the actual rent that was paid to the owner by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction at source based on the nature of payment and it is imperative that the correct rate of tax is applied depending on the nature of payments. 17. In view of the aforesaid discussions we are of the considered view that the payments made towards CAM charges are in the nature of contractual is payments that are made for availing maintenance services and they are not paid for use of any premises/equipment. Therefore the cam charges would be subjected to deduction of tax at source u/s. 194C of the Act at 2%. The assessee has applied the right rate of tax for deduction at source at 2% on CAM charges and therefore the assessee cannot be held to be an assessee in default u/s. 201(1) of the Act. We therefore allow the appeal in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
