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TMI Blog2023 (3) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER ANUBHAV SHARMA, J. M.: 1. The present appeal has been preferred by the Assessee against the order dated 29.08.2021 of Ld. CIT(A), National Faceless Appeal Centre (NFAC) (hereinafter referred as Ld. First Appellate Authority) arising out of an appeal before it against the assessment order dated 23.03.2020 passed u/s 201(1A) of the Income Tax Act, 1961 (hereinafter referred as the Act ) by the AO, (hereinafter referred as the Ld. AO). 2. The assessee has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case the learned Assessing Officer has erred in law in treating the Common Maintenance Charges as part of rent. 2. The appellant had correctly deducted tax at sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndlord, other than under the head rent, falls into the category of rent and relied the judgment of Hon ble Punjab and Haryana High court in the case of Sunil Kumar Gupta Vs. ACIT (2016) 389 ITR 38/73. 7. Now admittedly in the case in hand there was no separate agreement between the assessee tenant, the landlord and the service provider for common maintenance, M/s. Ambience Facilities Management Pvt. Ltd which is owned by Ambience Group to which the rent was paid. The coordinate bench, on which one of us, the judicial member, was in quorum, in ITA No. 1738/Del/2020 in case of M/s. Johnson Watch Company Pvt. Ltd. Vs. ACIT , vide order dated 9/11/22, has taken into account similar circumstances including the judgment of Sunil Kumar Gupta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest to exclusion of others. 8. Merely because a single agreement is executed between lessor and lessee creating liability on lessee for both rent and CAM charges does not discard the distinguishing nature of the two payments. As for the Rent and Eviction Laws the two may have no difference but under the Act‟, they are different head of expenditures of the lessee. The rent‟ is on account of use‟ of the property given into a exclusive possession of the lessee for the running of business but the CAM charges are for maintenance of the common areas, used or not used by the lessee. There is no reason to distinguish between the nature of two payments made by the lessee to the lessor if lessor keeps rent to himself and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 194-I of the Act and the payment for operation/maintenance was made directly to the services providers after deduction of TDS u/s 194C of the Act. There is a Tri-party Agreement which was on record before the Assessing Officer as well as before the CIT(A). These facts were never disputed by the Assessing Officer as well as the CIT(A). The only dispute that arises by revenue that assessee company should deduct TDS 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for use of the premises. While there are no expenses incurred against the rent except for general building maintenance and municipal charges , the CAM involves employment of separate staff and separate operations involved on day to day basis. Hence, we hold that the provisions for rent are governed by Section 194I and CAM charges by Section 194C of the Act. The AO is directed to recompute the CAM charges, taking into consideration the two sections mentioned above. 8. In the light of the aforesaid discussion, the bench is of considered opinion that Ld. Tax Authorities below have fallen in error in holding that the assessee was required to pay TDS @10% towards the common area maintenance charges. Consequently the grounds raised by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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