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TMI Blog2022 (11) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... e different and distinct and the character of the payment is also different and distinct, then, on the payments towards maintenance charges has to be made after TDS @ 2% u/s 194C of the Act and not @ 10% u/s 194I of the Act. From the material available on record, it is clearly discernible that the assessee company has paid rent to the owner after deduction u/s 194 of the Act @ 10% and the payment for operation/maintenance was made directly to the service provider company after deduction of tax u/s 194C of the Act. Therefore, we are inclined to hold that in the present case the common area maintenance charges was not forming part of the actual rent paid to the owner by the assessee company. Payments of rent and common area maintenance cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent deducted by the assessee under section 194C on payment of Rs 4,43,046 to Ambience Developers and Infrastructure and thus creating a demand of Rs 35,887 under section 201(1) and Rs 32,298 under section 201(1A) is unjust, illegal, arbitrary, illusory and the demand deserves to be quashed. 3. The action of the learned CIT(A) in holding 10 percent TDS should have been deducted under section 194I instead of 2 percent deducted by the assessee under section 194C on payment of Rs.4,25,324 to Ambience Developers and Infrastructure and thus creating a demand of Rs 32,688 under section 201(1) and Rs 28,275 under section 201(1A) is unjust, illegal, arbitrary, illusory and the demand deserves to be quashed. 4. The action of the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of even in the absence of the assessee, after hearing the arguments of the ld. Sr. DR appearing on behalf of the Department. We, therefore, proceed to adjudicate the appeal accordingly. 4. From the grounds as reproduced hereinabove, we note that the sole issue for our adjudication is as to whether the AO as well as the ld.CIT(A) were correct and justified in holding that the TDS @ 10% should have been deducted u/s 194I of the Income-tax Act, 1961 (for short, the Act ) instead of 2% deducted by the assessee u/s 194C of the Act on the payment to Ambience Developers and Infrastructure and creating demands u/s 201(1) and section 201(1A) of the Act. 5. The ld. Sr. DR supported the assessment as well as the first appellate order and subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on payment made directly to operation/maintenance services providers u/s 194-I of the Act instead of Section 194C of the Act by relying on the judgment of the Hon ble High Court of Punjab Haryana in case of Sunil Kumar Gupta vs. ACIT 389 ITR 38 wherein the Hon ble Court held that maintenance charges must form a part of the rent while calculating the annual value of property u/s 23(1) of the Act for the purpose of Section 22 of the Act. However, in the present assessee company s case, the common area maintenance charges was not forming the part of the actual rent paid to the owner by the assessee company. There is a separate agreement between the Owner, Tenant and service provider for common area maintenance which is distinguishing fact a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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