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TMI Blog2022 (12) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction of tax u/s 194C - 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 charges have been made to distinct entities/companies, therefore, the authorities below were not right in creating the impugned liability payable by the assessee firm under the provisions of subsections (1) and (1A) of section 201 - respectfully following the case of Nijhawan Travel Service (P) Ltd. [ 2022 (7) TMI 176 - ITAT DELHI] the grievance/grounds of the assessee are allowed and the AO is directed to delete the impugned liability u/s 201(1) and 201(1A) of the Act. Appeals filed by the assessee are allowed. - Shri Anil Chaturvedi, Accountant Member And Shri C.M. Garg, Judicial Member For the Assessee : Shri Vishal Kalra, Advocate And Ms Sumisha Murgai, CA For the Revenue : Shri Kanav Bali, Sr. DR ORDER PER C.M. GARG, JM: These appeals filed by the assessee are directed against the orders dated 22.01.2020 of the CIT(A)-38, Delhi, relating to Assessment Years 2011-12 2012-13. 2. The grounds of appeal rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above grounds are independent and without prejudice to the other grounds of appeal preferred by the Appellant. The Appellant prays for leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before, or at, the time of hearing of the appeal. ITA No.1997/Del/2020 (AY 2012-13) 1. That on the facts and circumstances of the case and in law, the Ld. TDS Officer based on conjectures and surmises, has erred in holding the Appellant as an assessee-in-default in relation to alleged short-deduction of taxes amounting to INR 14,29,910 under section 201(1) / 201(1 A) of the Act. The Ld. CIT(A) further erred in upholding the action of the Ld. TDS Officer. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in affirming the action of the Ld. TDS Officer in holding the Appellant as an assessee-in-default and allegedly raising a tax demand of INR 7,54,964 for short deduction of taxes from the payments made for Common Area Maintenance ( CAM ) charges to the lessors. 2.1 That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in arbitrarily upholding the action of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench in the case of Kapoor Watch Company Pvt. Ltd., vide order dated 05.01.2021 in ITA No.889/Del/2020, for AY 2011-12 and, therefore, the grounds of appeal may kindly be allowed. He has also placed reliance on the decision of the ITAT Delhi, SMC Bench dated 1st July, 2022 in the case of Nijhawan Travel Service (P) Ltd. vs. ACIT in ITA No.1417/Del/2020 for AY 2012-13. 4. On careful consideration of the rival contentions, we are of the considered view that identical issue was placed before the ITAT Delhi SMC Bench in the case of Nijhawan Travel Service (P) Ltd. (supra) and the coordinate Bench of the Tribunal by order dated 01.07.2022 in ITA No.1417/Del/2020, for AY 2012-13, held as follows:- 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 authorities below, nor by the learned Sr. DR before us, that the assessee has deducted TDS u/s 194C of the Act on the payment of CAM charges to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate 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, sublease, tenancy or any other agreement or arrangement for the use of (either separately or together) any, - (a) land; or (b) building (including factory building); or (c) land appurtenant to a building (including factory building); or (d) machinery; or (e)plant; or (f) equipment; or (g) furniture; or ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee before us remains the same as were therein involved in the aforesaid case, therefore, in the backdrop of our aforesaid deliberations, and respectfully following the aforesaid order of the Tribunal, we herein conclude, that as claimed by the assessee, and rightly so, the CAM charges paid by it were liable for deduction of tax at source @2%, i.e., u/s.194C of the Act. We, thus, in terms of our aforesaid observations set-aside the order of the CIT(A) who had approved the order passed by the AO treating the assessee company as an assessee-in-default u/s.201(1) of the Act. The Grounds of appeal no.4 to 4.5 are allowed in terms of our afore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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