TMI Blog2023 (1) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... ight in creating the impugned liability payable by the assessee firm under the provisions of sub-sections (1) and (1A) of section 201 - As respectfully following the order of Nijhawan Travel Service (P) Ltd. [ 2022 (7) TMI 176 - ITAT DELHI] the grievance/grounds of the assessee are allowed and the AO is directed to delete the impugned liability u/s 201(1) and 201(1A) of the Act. Appeal filed by the assessee is allowed. - ITA No.1676/Del/2020 - - - Dated:- 6-12-2022 - Shri C.M. Garg, Judicial Member And Shri Pradip Kumar Kedia, Accountant Member For the Assessee : Shri Manoj Kumar, CA For the Revenue : Shri Kumar Pranav, Sr. DR ORDER PER C.M. GARG, JM: This appeal filed by the assessee is directed against the order dated 14.08.2020 of the CIT(A)-38, Delhi, relating to Assessment Year 2012-13. 2. The grounds of appeal raised by the assessee read as under:- 1 That the honorable CIT(A)-XXXVIII has erred in law and on facts in sustaining the addition of Rs. 197503.00 comprising of TDS liability of Rs. 104244/- and Interest liability of Rs.93299/- on assessed TDS liability on illegal and untenable grounds. Hence, the addition as such may be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the TDS Officer dated 25.02.2011 u/s 190(1) of the Act, the TDS charges are applicable @ 0.5% instead of 10% and the assessee has deducted TDS @ 2% which is sufficient to comply with the provisions of the Act. Therefore, no further disallowance or addition can be made in this regard. The ld. AR also submitted that the issue is squarely covered in favour of the assessee by the various judgements of the Hon ble High Court of Delhi and the coordinate Benches of the Tribunal including the order of the ITAT, Delhi D Bench in the case of Kapoor Watch Company Pvt. Ltd., vide order dated 05.01.2021 in ITA No.889/Del/2020, for AY 2011-12 and, therefore, the grounds of appeal may kindly be allowed. He has also placed reliance on the decision of the ITAT Delhi, SMC Bench dated 1st July, 2022 in the case of Nijhawan Travel Service (P) Ltd. vs. ACIT in ITA No.1417/Del/2020 for AY 2012-13. 4. On careful consideration of the rival contentions, we are of the considered view that identical issue was placed before the ITAT Delhi SMC Bench in the case of Nijhawan Travel Service (P) Ltd. (supra) and the coordinate Bench of the Tribunal by order dated 01.07.2022 in ITA No.1417/Del/2020, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e., as to whether the CAM charges paid by the assessee were liable for deduction of tax at source u/s. 194-1, i.e., @10% or u/s 194C, i.e, @2%. Before adverting any further it would be relevant to cull out the provisions of Section 194-1 of the Act, which reads as under: 194-1.Rent. Any person, not being an individual or a Hindu undivided family, whO is responsible for paying to a resident any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of- (a) two per cent for the use of any machinery or plant or equipment; and (b) ten per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings: Provided that no deduction shall be made under this 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said 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 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/s.194C of the Act. Observing, that payment of CAM charges were essentially a part of the rent, the AO treated the assessee as an assessee-in-default for short deduction of tax at source u/ss. 201(1)/201(1A) of the Act. On appeal, it was observed by the Tribunal that the CAM charges paid by the assessee did not form part of the actual rent 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 aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and not @ 10% u/s 194I of the Act. From the material available on record, it 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 directly to the service provider company after deduction of tax u/s 194C of the Act. Therefore, we are inclined to hold that in the present case the common area maintenance charges was not forming part of the actual rent paid to the owner by the assessee company. Payments of rent and common area maintenance charges have been made to distinct entities/companies, therefore, the authorities below were not right in creating the impugned liability payable by the assessee firm under the provisions of sub-sections (1) and (1A) of section 201 of the Act. Therefore, respectfully following the order of the coordinate Bench of the Tribunal in the case of Nijhawan Travel Service (P) Ltd. (supra), the grievance/grounds of the assessee are allowed and the AO is directed to delete the impugned liability u/s 201(1) and 201(1A) of the Act. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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