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Facts
The Revenue appealed against the deletion of additions made by the AO on account of short deduction of TDS on payment of CAM charges. The facts were identical to previous assessment years where a Coordinate Bench had decided the issue.
Held
The Tribunal held that CAM charges, being separate from lease rentals and determined based on area, fall under Section 194C, not Section 194-I, of the Income Tax Act, 1961. Therefore, TDS was not required to be deducted at 10%.
Key Issues
Whether TDS on Common Area Maintenance (CAM) charges is deductible under Section 194C or 194-I of the Income Tax Act, 1961.
Sections Cited
201(1), 201(1A), 194C, 194-I
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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SMT. ANNAPURNA GUPTA
the same were heard together and are being disposed of by a common order.
Ld. Counsel appearing for the assessee at the outset submitted that the issue involved for adjudication in the instant appeals is squarely covered by the order of Coordinate Bench in assessee’s own case for A.Y. 2011-12 & 2012-13 rendered in (A.Y. 2011-12) and (A.Y. 2012- 13) dated 09.02.2023, holding that payment of CAM charges is governed by Section 194C, thus not liable to deduct TDS @ 10% under Section 194-I. He submitted that the impugned orders of Ld. CIT(A) being in consonance with the aforesaid decision of the Coordinate Bench of the ITAT, require no interference.
Ld. DR could not controvert the aforesaid factual position. She, however, relied on the orders passed by the AO and submitted that the Revenue has not given up its stand.
We have heard the submissions made on behalf of the parties and perused the material available on record. It is seen that the Coordinate Bench in assessee’s 202/Del/2020 (A.Y. 2012-13) vide order dated 09.02.2023 has decided the impugned issue by observing as under:
“6. The undisputed 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) is that the rent by any name, lease, sub-lease, tenancy or the reliance on the judgment wherein the services are intrapolated into the rent stand on a different pedestal. In the Instant case, the determination of the rent or CAM are separate and the CAM arrangements are not essential and an integral part for use of the premises. While there are no expenses incurred against the rent except for general building maintenance and municipal charges, the CAM Involves employment of separate staff and separate operations involved on day to day basis. Hence, we hold that the provisions for rent are governed by Section 194I and CAM charges by section 194C of the Act. The AO is directed to re- compute the CAM charges, taking into consideration the two sections mentioned above."
Undisputedly the facts of the case for the impugned assessment years are identical to A.Y. 2011-12 & 2012-13. In these years also the payment is in respect of Common Area Maintenance (CAM) Charge in the mall in which the assessee has leased property. The order of Ld. First Appellate Authority being in conformity with the earlier order of the Tribunal in assessee’s own case we see no reason to interfere with the same. Thus, the present appeals preferred by the Revenue are devoid of any force and are liable to be dismissed. We order accordingly.
2013-14, 2014-15 & 2015-16 are dismissed.
Order pronounced in open court on 09.04.2025.