TaxTMI 
TaxTMI 
2025 (4) TMI 1830
X X X X Extracts X X X X
X X X X Extracts X X X X
....AO issued notice to the assessee requiring the assessee to furnish details and in response to which requisite details were furnished regarding Common Area Maintenance Charges (CAM Charges). Assessing Officer observed that tax should have been deducted at 10% on CAM charges u/s 194I instead of 2% u/s 194C and accordingly a show cause notice was issued. In response, the assessee filed the submissions. However, the AO relying on the decision of the Hon'ble Supreme Court in the case of Japan Airlines Co Ltd. vs. CIT (2015) 60 taxmann.com 71, Hon'ble Delhi High Court in the case of Apeejay Surrendra Park Hotels Ltd. vs. UOI (67 taxmann.com 291) and the decision of the Hon'ble Punjab and Haryana High Court in the case of Sunil Kumar Gupta vs. ACIT [(2016) 73 taxmann.com 374] rejected the explanation of the assessee that it is clear that the in the nature of common area which are part of rental activity are covered under section 194I and further, in the instance case, even for rental and common area (CAM) payments is same, thereby removing any doubts to the nature of CAM expenses; and as CAM expenses are squarely covered under the of Section 194I, therefore the assessee is tre....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the orders of the Assessing Officer and pleaded that the grounds taken by the Revenue be allowed. 6. On the other hand, ld. AR of the assessee reiterated the submissions made before the ld. CIT(A) and relied upon the findings of the ld. CIT(A) and prayed that the order of the ld. CIT(A) may be sustained and the appeal of the Revenue be dismissed. 7. Considered the rival submissions and material placed on record. We find that the ld. CIT(A) has given detailed finding while allowing the appeal of the assessee and for the sake of clarity, the relevant findings are reproduced below :- "6,4 Considering the facts of the case, I am of the considerate view that CAM charges is for utilization of services received in the form of maintenance of lifts installed in the common area; water, electricity consumed in the common area, security services for the entire complex, maintenance of landscaping attached thereto; parking area; etc., hence, these services cannot be clubbed with Rental Charges of the premises but are in the nature of Maintenance Charges that are necessary to be incurred in the commercial complex and necessarily fall within the meaning of "work" as defined in sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re being paid to the one party, i.e., M/s DLF Cyber City Developers Ltd. 6.7 There are plethora of judicial decisions on this issue which also include judgments of the Hon'ble Jurisdictional Delhi ITAT, where the payments are being made to one party only and through the same single agreement for rent and maintenance charges. The Hon'ble Delhi ITAT has come across this situation in the case of Aero Club vs. DCIT [149 taxmann.com 339 (2023), wherein the tenant and landlord had entered into single agreement for Rent and CAM charges. In its decision in this case, it was held by Hon'ble Delhi ITAT that the payment of CAM Charges is a separately identifiable transaction on which TDS is deductible u/s 194C and this payment cannot be clubbed with payment of Rent to which Section 194I applies. It is specifically observed by Hon'ble Delhi ITAT at Para 8-11 as under: "8 After having considered the submissions of the assessee, the ld. CIT(A) held that undisputedly there is single lease agreement for payment of rent as well as CAM charges The ld AR has submitted that payment of CAM charges is nothing but reimbursement of common area maintenance expenses incurre....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... outset, we find that the issue of deductibility of tax on rent and CAM was examined by the Tribunal in the case of Connaught Plaza Restaurants (P) Lid. v. Dy CIT (IT Appeal Nos. 993 & 1984 (Delhi) of 2020, dated 31-12-2021). Lifestyle international (P) Ltd v. Asst. CIT (2022) 140 taxmann. com 445 (Bang. Trib)/[TS-352- ITAT-2022] Bang and Lifestyle International (P) Ltd v. Asst. CIT (2022) 141 taxmann. com 559 (Bang. -Trib) ITA No 400-405 (Bang,) of 2021, dated 26-4-2022] and also by the order of this bench in the case of Yum Restaurants India (P) Ltd. v. ACIT (TDS) (2023] 147 taxmann. com 257/100 ITR (T) 239 [IT Appeal No. 1115 (Delhi) of 2020. dated 3-10-2022) (Delhi - Trib)/[IT Appeal No. 1115 (Delhi) of 2020. dated 3 10-2022) The operative part of the said order is as under :- "6. The undisputable fact in this case is that while the lease rentals are paid based on a fixed percentage on the net revenue, the CAM charges are based on the per sq ft area The observation of the ld. CIT(A) s that the rent by any name, lease, sub-lease, tenancy or the reliance on the judgment wherein the services are interpolated into the rent stand on a different pedestal. In the instant case....