TaxTMI 
TaxTMI 
2023 (1) TMI 1071
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.... the honorable CIT(A)-XXXVIII has erred in law and on facts in sustaining the addition as no scn was issued by the Ld AO stating that why the assessee should not be held to be assessee in default u/s 201(1) and interest u/s 201(1A) should be levied upon him. Hence, the addition is illegal and may be deleted. 4 That the honorable CIT (A)-XXXVIII has erred in law and on facts in sustaining the addition of Rs. 197503.00 as the order under section 201(1) and 201(IA) is illegal for want of notice with specific charge and hence, the order may be quashed. 5 That the honorable CIT(A)-XXXVIII has erred in law and on facts in sustaining the addition of Rs. 197503.00 without verifying from the deductee whether It has included the same in his income or not. Hence, the addition as such may be deleted. 6 That the honorable CIT(A)-XXXVIII has erred in law and on facts in sustaining the addition of Rs. 104244.00 on illegal and untenable grounds. Hence, the addition as such may be deleted. 7 That the honorable CIT(A)-XXXVIII has erred in law and on facts in sustaining the addition of interest of Rs. 93,299.00 on illegal and untenable grounds. Hence, the addition ....
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....red 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 respective third parties who provided services to maintain common area. 6. Now I advert to the proposition rendered by ITAT Delhi Bench "B" in the case of Connaught Plaza Restaurants P. Ltd. Vs. DCIT(supra), where in paras 11 to 13, the coordinate Bench of the Tribunal, by referring earlier judgment of the ITAT Delhi Bench in the case of Kapoor Watch Company Pvt. Ltd. (supra), held as under: "11. We shall now advert to the claim of the assessee that both the lower authorities had erred in law and the facts of the case in concluding that the CAM charges paid by the assessee to Ambience Group (supra) were liable for deduction of tax at source @10%, i.e., u/s 194-1 and not @2%, i.e., U/S.194C of the Act, as claimed by the assessee. Succinctly stated, the assessee company which is engaged, inter alia, in the business of running of fast food restaurants in North and East Ind....
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....hatever 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 (h) fittings, whether or not any or all of the above are owned by the payee; ....... ........" (emphasis supplied) On a perusal of the definition of the terminology "rent" as had been provided in the aforesaid statutory provision, viz. Sec. 194-1 of the Act, we find that the same includes payment for the use of land, building, land appurtenant to a building, machinery, plant, equipment, furniture or fittings. In sum and substance, only the payments for use of premises/equipment is covered by Section 194-1 of the Act. In our considered view, as the CAM charges are completely independent and separate from rental payments, and are fundamentally for availing common area maintenance services which may be provided by the landlord or any other agency, therefore, the same cannot be brought within the scope and gamut of the defi....
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....e 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 aforesaid observations." 7. In view of the foregoing discussion and factual position noted by us, which has not been controverted by the learned DR, I am in agreement with the claim of the learned AR that the payment towards CAM charges are in the nature of contractual payment which are made for availing services/ facilities and not for the use of any premises/ equipment, therefore, same would be subject to deduction of tax at source u/s 194C of the Act and not u/s 194I of the Act. This view has also been taken by the Tribunal in the case of Kapoor Watch Company Pvt. Ltd. (supra). As the facts involved in the present case of assessee before us are quite identical and similar to the facts of the case involved in the cases of Connaught Plaza Restaurants P. Ltd. (supra); and Kapoor Watch Company Pvt. Ltd. (supra), ....