S H DONUT EMPIRE INDIA PRIVATE LIMITED,KHAR WEST vs. ADDL/JCIT (A), PANAJI

ITA 2306/MUM/2026Status: DisposedITAT Mumbai23 September 2026AY 2013-143 pages
AI SummaryAllowed

What were the facts?

The assessee, S H Donut Empire India Pvt. Ltd., is in appeal against the order of the Additional/Joint CIT(A) (NFAC) dated 29.12.2025, which upheld the order of the Assessing Officer (AO)/ITO (TDS) dated 19.03.2020. The AO had treated the assessee in default under Section 201(1) and liable for interest under Section 201(1A) for Assessment Year 2013-14. The dispute arose from the AO's belief that the assessee had wrongly deducted tax at 2.00% under Section 194C instead of 10.00% under Section 194I on payments made to Runwal Group for common area maintenance (CAM) charges. The AO noted that the assessee paid Rs. 21,304/- per month for CAM charges without TDS. The assessee contended that these payments were reimbursements of actual expenses incurred by R. Mall Developers Pvt. Ltd. without any mark-up, and thus no TDS was required. The AO disagreed, treating the payment as rent, leading to a short deduction of Rs. 25,565/- and interest of Rs. 22,877/-. The CIT(A) confirmed the AO's order.

What did the Tribunal hold?

The Tribunal held that the assessee's contention throughout the proceedings under Section 201(1) was that the payments made were on account of reimbursement of common area maintenance charges without any mark-up. The Tribunal found that when payments are made merely as reimbursement of common area maintenance charges on an actual basis, no Tax Deducted at Source (TDS) was warranted on such payments. Therefore, the grounds of appeal raised by the assessee were allowed. The Tribunal did not explicitly mention any issue left undecided. The operative direction was to allow the appeal of the assessee.

What were the issues?

1. Whether the payments made by the assessee for common area maintenance charges to R. Mall Developers Pvt. Ltd. constitute 'rent' attracting TDS under Section 194I of the Income Tax Act, 1961, or are they reimbursements of expenses requiring no TDS. Assessee's Contentions: The assessee argued that the payments were solely for reimbursement of actual expenses incurred by R. Mall Developers Pvt. Ltd. for common area maintenance, without any additional mark-up. They asserted that TDS was made where applicable and that no TDS was required on mere reimbursement of expenses. Revenue's Contentions: The revenue, through the AO and confirmed by the CIT(A), contended that the nature of the payment, as per the agreement clause and statutory provisions, was for rent, necessitating TDS under Section 194I. They did not accept the assessee's claim of reimbursement without providing supporting bills/invoices for the CAM charges.

Which sections of the Income-tax Act were involved?

Section 194C,Section 194I,Section 201(1),Section 201(1A),Section 254(1)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL“G” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER (Physical Hearing) S H Donut Empire India Pvt. Ltd. ADDL/JCIT(A), Panaji G-1, S.H. Ram Building, Road No. vs Office of the Commissioner of 18-A, Khar West, Mumbai – 400052. Income Tax Appeal, Panaji, [PAN: AANCS6071K] Goa – 403001. Appellant / Assessee Respondent / Revenue Assessee by Shri Haresh Wadhwani, Advocate Revenue by Shri Basavaraj Hiremath, CIT-DR a/w Shri Rajgopal Parthasarathi, Sr. DR Date of Institution 18.02.2026 Date of hearing 20.07.2026 Date of pronouncement 23.09.2026 Order under section 254(1) of Income Tax Act

PER PAWAN SINGH, JUDICIAL MEMBER:

1.

This appeal by assessee is directed against the order of ld. CIT(A) / NFAC dated 29.12.2025 for Assessment Year (AY) 2013-14 in treating the assessee in default vide order dated 19.03.2020 passed under section 201(1) / 201(1A) of the Income Tax Act.

2.

Brief facts of the case are that the Assessing Officer (AO)/ITO (TDS) was having information that S.G. Mittal Enterprises had deducted tax at the rate of 2.00% under Section 194C instead of 10.00% under Section 194I for payments made

The order continues below.

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