TaxTMI 
TaxTMI 
2026 (6) TMI 1173
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....s dates and in response, ld. AR of the assessee attended from time to time and submitted the relevant information is called for. 3. On perusal of the submission of the assessee, the AO observed that assessee is a tenant and has paid CAM charges after deducting TDS @ 2% u/s. 194C of the Act. The AO observed that these collections / payments are directly relatable to and being part of the rental activity and also mentioned in the same contractual agreement, therefore, he was of the view that provisions of section 194I of the Act is attracted and TDS of 10% is deductible as against 2% deducted by the assessee. Therefore, the AO considered the assessee in default. The AO discussed the provisions of section 194I in his order and subsequent development and amendment w.e.f. 01.10.2009 was discussed and he was of the view that the provisions of section 194I were pertained to the meaning of rent to include CAM charges also. By relying on several decisions, he proceeded to treat the assessee in default and proceeded to determine the difference in deduction of tax as per section 201/201(1A) of the Act and accordingly, he levied the total demand of Rs. 4,87,705/- u/s. 201/201(1A) of the Act....
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....ices. The Explanation below section 194-1 which defines "Rent" takes into its ambit 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 (b) building or (c) land appurtenant, to a building (including factory building) or (h) fittings, whether or not any or all of the above are owned by the payee and hence it is clear that any payment even for use of any building and land appurtenant, there to including furniture/fittings is part of rent. CBDT vide circular No. 715 dated 8-8-1995 (Question No. 24) has also clarified that there is composite arrangement for use of premises and provision of manpower, such agreement in essence is for taking premises on rent and hence provisions of section 1941 are-applicable. This view also gets support from the decision of Hon'ble High Court in the case of Sunil Kumar Gupta v. Asstt. CIT [2016] 73 taxmann.com 374/243 Taxman 65/389 ITR 38/[2017] 298 CTR 106 (Punj. & Har.), in which it is held that where the agreement provides that the owner of the premises shall pay for common facilities, then it is reasonable to presume that the same is factored....
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....charges u/s. 194-C @ 2%>. Hence, the appeal of the assessee is hereby allowed. 6.8 In view of the aforementioned ruling of the Hon'ble ITAT in the case of Aero Club and other decisions, it is principally decided that payment of CAM charges is a separate transaction to which section 194C applies irrespective whether there are separate agreements or the payments are flowing out of a single agreement and irrespective whether the payment is to a single entity or separate entities. Hence, I am of the considered view that the payment of CAM charges is covered by Section 194C on which TDS @ 2% is deductible. Therefore, Grounds 1, 2,3, 4, 5 & 6 are decided in favour of the appellant." 5. Aggrieved with the above order, assessee is in appeal before us raising following grounds of appeal :- "1. Whether on the facts and in the circumstances of the case and in law, the ld. CIT (A), Delhi was justified in holding that Common Area Maintenance charge 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. 2. Whether on the facts and in the circumstances of the case and in law, the ld. CIT (A), Delhi ....
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....to Contractors and hence can only be taxable under the said section. 6.5 In the course of hearing before this office, the appellant has also drawn inference from the order of the Hon'ble Delhi ITAT in the case of HV Global Pvt Ltd Vs ITO (ITA No. 1676/Del2020) dated 23-11-2022 wherein it is held at Para 5 as under: "5 In the present case also the AO in the assessment order observed that the payments received by Ambience group are split into two companies of same group on single contract one for rent and the other for maintenance charges. However, the AO noted that this arrangement has been made to avoid the higher deduction of TDS ate applicable to which we do not agree as when the receiver of rent and receiver of maintenance charges are different and distinct and the character of the payment is also different and distinct. then, the payments towards maintenance charges has to be made after TDS @ 2% u/s. 194C of the Act and not @ 10% u/s. 194 of the Act From the material available on record t is clearly discernible that the assessee company has paid rent to the owner after deduction u/s. 194 of the Act @ 10% and the payment for operation/maintenance was made d....
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....essor on general maintenance electric, water and security services etc. Further, it has been claimed that, the common area is outside the area which is leased out to the assessee. These arguments are not acceptable because the common area and other services provided by the lessor are also enjoyed by the appellant along with the specified area. AS per the same agreement the appellant is required to pay lease rent as well as CAM charges. It is also noticed that there is no distinction between CAM charges and lease rent payments except for raising separate invoices. The Explanation below section 194-I which defines "Rent" takes into its ambit any payment, by whatever name called, under any lease, sub- lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any (b) building or (c) land appurtenant, to a building (including factory building) or (h) fittings, whether or not any or all of the above are owned by the payee and hence it 1S clear that any payment even for use of any building and land appurtenant, there to including furniture/fittings is part of rent. CBDT vide circular No. 715 dated 8-8-1995 (Question No. 24) has also clarified that....