Common area maintenance charges are contractual maintenance payments, not rent, and fall under section 194C instead of section 194I.

Common area maintenance charges paid for cleanliness, utilities and upkeep of shared areas were treated as contractual payments for maintenance services, not as consideration for use of premises. On identical facts from the earlier year, the same treatment had already been accepted, and the Revenue's appeal had been dismissed by the High Court in the prior round. The charges therefore fell within section 194C and not section 194I of the Income-tax Act, so deduction of tax at source was not required under the rent provision and the demand deletion was upheld.

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Issues: Whether common area maintenance charges paid by the assessee were liable for deduction of tax at source under section 194C of the Income-tax Act, 1961, or were to be treated as rent attracting section 194I of the Income-tax Act, 1961.

Analysis: The assessee's case was found to be on identical facts to its earlier year, where the same CAM charges had already been held to be contractual payments for maintenance services and not payments for use of premises. The decision was reinforced by the dismissal of the Revenue's appeal by the High Court in the earlier round. The charges were characterized as expenditure for cleanliness, utilities, and maintenance of common areas, separate from rental consideration, and therefore outside the scope of "rent".

Conclusion: CAM charges were held deductible under section 194C and not under section 194I, and the Revenue's challenge to the deletion of the demand failed.

Ratio Decidendi: Common area maintenance charges paid for maintenance services and shared facilities, rather than for use of premises, are contractual payments falling within section 194C and do not constitute rent under section 194I.

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