2026 (3) TMI 788

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....umbai was justified in holding that Common Area Maintenance (CAM) charges paid by the assessee are in the nature of contractual payment are liable to be deducted TDS u/s. 194C of the I.T. Act and not as per provisions of Section 194I of the Act. ii) Whether on the fact and in the circumstances of the case and in law, the Addl. /JCIT(A)-I, Mumbai was justified in not considering the judgment of Hon'ble High Court of Delhi in the case of Appejay Surrendera Park Hotels Ltd. vs. UOI in WP(C) 1924/1999, wherein the Hon'ble Court has held that the word 'rent' in section 194I of the I.T. Act has to be interpreted widely and not confined to payments received towards a lease, sub lease or tenancy or transactions of such like nature. 2. A....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Hon'ble Delhi High Court vide its order dated 22.5.2025 in ITA no. 170/2025 & CM Appeal Nos. 31794/2025, 31795/2025 dismissed the appeal of the Revenue by observing as under:- "7. As noted above, the Assessee filed a second appeal before the learned ITAT. learned ITAT following its earlier decision in ITA No.504/Del/2020, concluded that CAM charges could not be brought within the scope of definition of "rent" as defined under Section 194I of the Act. According to the ITAT, the payments made would fall within the meaning of "work" as defined under Section 194C of the Act. 8. In the aforesaid context, the Revenue has projected the following questions for consideration of this Court: "A. Whether on the facts and in ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....m 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 definition of terminology "rent". On the other hand, we are of the considered view, that as the CAM charges are in the nature of a contractual payment made to a person for carrying out the work in lieu of a contract, therefore, the same would clearly fall within the meaning of "work" as defined in Section 194C of the Act. In our considered view, as the CAM charges are not paid for use of land/building but are paid for carrying out the work for maintenance of the common area/facilities that are available along with the lease pr....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ent that was paid to the owner by the assessee company. As the facts involved in the case of the assessee before us remains the same as were therein involved in the aforesaid case, therefore, in the backdrop of our aforesaid deliberations, and respectfully following the aforesaid order of the Tribunal, we herein conclude, that as claimed by the assessee, and rightly so, the 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 aforesa....