Common area maintenance charges separately identifiable from rent attract TDS as work payments, not rent, under lease arrangements.

Common area maintenance charges under a lease were treated as payments for work, not rent, where the charges covered maintenance and allied services such as lift upkeep, water and electricity in common areas, security, landscaping and parking. The Tribunal noted that the fact that rent and CAM charges arose under one agreement and were paid to the same lessor was not decisive when the maintenance component remained separately identifiable. On that basis, the charges attracted deduction under section 194C and not section 194I, so the Revenue's TDS challenge failed and the assessee's treatment was accepted.

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Issues: Whether Common Area Maintenance Charges paid under a lease arrangement were liable for deduction of tax as rent under section 194I of the Income-tax Act, 1961, or as payments for work under section 194C of the Income-tax Act, 1961.

Analysis: The payment towards CAM charges was found to relate to maintenance and allied services such as lift maintenance, water and electricity in common areas, security, landscaping and parking, and not to the use of the premises as rent. The fact that rent and CAM charges arose under a single agreement and were paid to the same entity was held not to be decisive, because CAM charges remained a separately identifiable transaction. The Tribunal also noticed the consistent view that where maintenance charges are distinct from rent, they fall within section 194C and not section 194I.

Conclusion: CAM charges were held to be taxable under section 194C and not to be clubbed with rent under section 194I. The Revenue's challenge failed, and the assessee succeeded.

Final Conclusion: The disallowance of the Revenue's case on TDS treatment of CAM charges was upheld, leaving the assessee free from the alleged short-deduction demand.

Ratio Decidendi: Charges for common area maintenance, when separately identifiable from rent, are payments for work and attract deduction under section 194C even if they arise under a single lease arrangement and are paid to the same lessor.

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