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Issues: Whether common area maintenance (CAM) charges paid by the assessee are taxable for TDS purposes as contractual payments attractable to Section 194C of the Income-tax Act, 1961 or as rent attractable to Section 194I of the Income-tax Act, 1961.
Analysis: The factual matrix shows CAM charges are contributions for shared expenses such as cleanliness, utilities and maintenance of common areas and are paid for services rendered rather than for use of land or premises. The Tribunal followed its earlier coordinate decisions and a subsequent order of the Hon'ble High Court of Delhi which upheld that CAM charges do not fall within the definition of 'rent' under Section 194I and are in the nature of contractual payments for carrying out work, thus attracting Section 194C. On parity of facts and relying on the Tribunal's and High Court's reasoning, the addition treating CAM charges as rent and holding the assessee as an assessee-in-default under Section 201(1)/201(1A) was set aside.
Conclusion: The Tribunal dismissed the Revenue's appeal and held that CAM charges are contractual payments liable to deduction of tax at source under Section 194C of the Income-tax Act, 1961 and not under Section 194I; the demand and related default proceedings under Section 201(1)/201(1A) are deleted in favour of the assessee.
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