TaxTMI 
TaxTMI 
2023 (5) TMI 28
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....2/- short TDS plus interest Rs. 1,09,327/-). 3. The ld. Counsel for the assessee submitted that the issue is squarely covered in favour of the assessee by the various orders of the coordinate bench of this Tribunal including the order of the ITAT Delhi, in the case of Kapoor Watch Company Pvt. Ltd. vs. ACIT, vide order dated 05.01.2021 in ITA No.889/Del/2020 for AY 2011-12 and order of ITAT, Delhi Bench 'B in the case of Connaught Plaza Restaurants P. Ltd. vs. DCIT dated 31.12.2021 in ITA No.993/ and 1984/Del/2020 for AYs 2011- 12 and 2012-13 submitted that the CAM charges paid by the assessee were liable for deduction of tax at source @ 2% u/s 194C of the Act and not @10% u/s 194-I of the Act. Therefore, as the assessee has deducted tax @....
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....a Restaurants P. Ltd. vs. DCIT (supra). 5. Replying to the above, the ld. Sr. DR has placed heavy reliance on the order of the AO and the order of the CIT(A) and drew our attention toward para 8 to 8.6 of the first appellate order and submitted that a perusal of the relevant lease deeds/franchise agreements clearly shows that it was mandatory for the owners of the rented premises to pay CAM charges in respect of such premises for maintenance of common area and for services. The ld. DR also submitted that after analyzing the relevant agreements and facts and circumstances of the case, the AO was right in holding that the provisions of section 194-I of the Act is applicable to the payment of CAM charges and the assessee has deducted TDS @ 2%....
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....ience Group (supra) were liable for deduction of tax at source @10%, i.e., u/s.194-I 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 India under the brand name "Mc. Donalds", had taken shop/spaces/units in commercial areas/malls on lease from various parties by way of lease agreements. Apart from the rent, the assessee-company had also paid CAM charges, i.e., charges which are fundamentally for availing common area maintenance services, which may either be provided by the landlord or any other agency. In so far the CAM charges that were paid by the assessee to the same party to whom ....
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.... section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed one hundred and eighty thousand rupees: ...................... ......................... Explanation.-For the purposes of this section,- (i) "rent" means any payment, by whatever 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 ....
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....d and/or brought within the meaning of "rent" as defined in Section 194-I of the Act. 13. In the backdrop of our aforesaid deliberations, we concur with the claim of the ld. AR that as the payments towards CAM charges are in the nature of contractual payments that are made for availing certain services/facilities, and not for use of any premises/equipment, therefore, the same would be subjected to deduction of tax at source u/s.194C of the Act. Our aforesaid view is supported by the order of the ITAT, Delhi in the case of Kapoor Watch Company P. Ltd. vs. ACIT in ITA No.889/Del/2020. In the aforesaid case, the genesis of the controversy as in the case of the assessee before us were certain proceedings conducted by the Department in the ca....