TaxTMI 
TaxTMI 
2026 (6) TMI 919
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....aw, the CIT(A) 49, Mumbai was justified in not considering the judgement of Hon'ble Delhi High Court in the case of Apeejay 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. That the appellant craves leave to add OR amend any one OR more of the grounds of the appeal as stated above as and when need for doing so may arise. 3. Whether on the facts and in the circumstances of the case and in law, the CIT(A)- 49, Mumbai was justified in holding that 3 Common Area Maintenance (CAM) charges paid by the Appellant are in the nature of contractual payment and are liable to be deducted TDS u/s 194C of the I.T Act." ITA No.- 7684/Del/2025 for A.Y. 2014-15 "1. Whether on the facts and in the circumstances of the case and in law, the CIT(A)- 49, Mumbai was justified in holding that Common Area Maintenance('CAM') charges paid by the Appellant are in the nature of contractual payment and are liable to be deducted TDS u/....
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.... has recovered expenses in the form of common Area Maintenance (CAM) chores from the tenants / occupants who have deducted TDS @ 2% under section 194C of the Act. Since these payments were held to be part of the rental activity. The department was of the view that TDS should have been deducted @ 10% u/s 194I of the Act. 5.1 Accordingly, proceedings u/s 201 were initiated to hold the tenants / deductors as assessee in default. Several notices were issued to the assessee in response to which the assessee submitted that CAM charges are primarily for the services provided and have been correctly classified u/s 194C of the Act. It was further contended that the assessee cannot be treated as assessee in default as the following prescribed conditions are satisfied. (i) Payee has furnished his return of income u/s 139 of the Act. (ii) It has taken into account such sum for computing its income. (iii) Payee has paid tax due to the income declared by it. 5.2 However, the Ld. AO held that the payments are essentially part of rental activity and are therefore covered u/s 194I of the Act. He therefore, held that the assessee to be in default u/s 201(1) of the Ac....
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.... The Assessee had also paid CAM charges after deducting TDS at the rate of 2% of the said charges, and had deposited the same. 5. However, according to the AO, CAM charges paid by the mall owners were essentially a part of rental activities and, therefore, TDS was required to be deducted on such payments under Section 194-I of the Act. On the aforesaid basis, it was concluded that the TDS was required to be deducted at the rate of 10% on such payments. The AO passed an order dated 30.03.2018 determining the TDS amount payable at 14,41,121/- under Section 201(1) of the Act and also computed the interest on the said amount at Rs. 4,23,477/- under Section 201(1A) of the Act. 6. Aggrieved by the aforesaid decision, the Assessee preferred an appeal before the CIT(A). However, the same was dismissed. 7. As noted above, the Assessee filed a second appeal before the learned ITAT. The 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 194-I of the Act. According to the ITAT, the payments made would fall within the meaning of "work" as ....
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....are available along with the lease premises, therefore, the same could not be characterized and/or brought within the meaning of "rent" as defined in Section 194- 1 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. v. 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 pertain proceedings conducted by the Department in the case of Ambience Group (supra) to verify the compliance of the provisions of Chapter XVII-B of the Act. On the basis of the facts that had emerged in the course of the proceedings, it was gathered by the Department that the owners of the malls in addition to the rent had been collecting CAM charges from the lessees on which TDS was deducted @2% i.e. u/....