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TMI Blog2022 (7) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... ices/ facilities and not for the use of any premises/ equipment, therefore, same would be subject to deduction of tax at source u/s 194C of the Act and not u/s 194I of the Act. This view has also been taken by the Tribunal in the case of Kapoor Watch Company Pvt. Ltd. ( 2021 (1) TMI 209 - ITAT DELHI] . As the facts involved in the present case of assessee before us are quite identical and similar to the facts of the case involved in the cases of Connaught Plaza Restaurants P. Ltd. ( 2022 (1) TMI 409 - ITAT DELHI] and Kapoor Watch Company Pvt. Ltd. (supra), therefore conclude that as claimed by the assessee the TDS on CAM charges paid by it is liable for deduction of tax at source @ 2% u/s 194C - we set aside the order of the AO as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges paid by the assessee were in the nature of rent liable for TDS @ 10% u/s 194-I of the Act and thus the assessee is liable for payment of tax and interest thereon since there was a short deduction of TDS due to default committed by it u/s 201(1) of the Act. The learned counsel vehemently pointed out that the AO was not correct in holding that the provisions of Section 194-I read with section 201(1) and 201(1A) of the Act were applicable in the present case, because in view of first proviso to Section 201(1), the assessee cannot be deemed to be in default in respect of short deduction of TDS, since the same, representing common maintenance charges, has already been taken and declared as income and tax has been paid thereon by the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered u/s 194I of the Act and, therefore, the assessee was rightly treated as an assessee in default within the meaning of Section 201(1) of the Act for failing to appropriately deduct tax on payment as per provisions of the Act. Learned DR also submitted that the Assessing Officer was right in rejecting the explanation of the assessee that TDS on CAM charges has to be deducted u/s 194C of the Act. 5. On careful consideration of the above submissions, first of all from the copies of the agreements placed by the assessee at serial nos. 13 to 17, pages 24 to 138, it is clearly gathered that CAM chares have been paid to different parties by executing agreements which do not form part of rent payment. It has not been disputed by the authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d pursuant to the lease agreements, or to an appointed or related party with whom the lease agreement had been entered into, the AO was of view that the assessee was obligated to deduct tax at source @10%, i.e., 194-1 of the Act. Backed by his aforesaid conviction the A.O had held the assessee as an assessee-in-default u/s.201(1) of the Act, for short deduction of tax at source @2%, i.e. U/S.194C instead of @10% u/s 194-1 of the Act. 12. Issue involved qua the aforesaid controversy lies in a narrow compass, i.e., as to whether the CAM charges paid by the assessee were liable for deduction of tax at source u/s. 194-1, i.e., @10% or u/s 194C, i.e, @2%. Before adverting any further it would be relevant to cull out the provisions of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equipment; or (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee; . .. (emphasis supplied) On a perusal of the definition of the terminology rent as had been provided in the aforesaid statutory provision, viz. Sec. 194-1 of the Act, we find that the same includes payment for the use of land, building, land appurtenant to a building, machinery, plant, equipment, furniture or fittings. In sum and substance, only the payments for use of premises/equipment is covered by Section 194-1 of the Act. In our considered view, as the CAM charges are completely independent and separate from rental payments, and are fundamentally for availing common area maintenance services whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy 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 the assessee company. As the facts involved in the case of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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