CONNAUGHT PLAZA RESTAURANTS PVT LTD.,NEW DELHI vs. DCIT CIRCLE-73(1), NEW DELHI

ITA 993/DEL/2020Status: DisposedITAT Delhi31 December 2021AY 2012-1321 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that CAM charges paid by the assessee were not part of rent and thus tax was correctly deducted under Section 194C, not Section 194I. Consequently, the assessee could not be treated as an assessee-in-default for short deduction.

What were the facts?

The assessee company, engaged in running McDonald's restaurants, deducted tax at source under Section 194C on Common Area Maintenance (CAM) charges paid to lessors. The Assessing Officer (AO) and CIT(A) held that tax should have been deducted under Section 194I, treating the CAM charges as part of rent.

What were the issues?

Whether CAM charges paid by a lessee to a lessor are considered rent attracting tax deduction under Section 194I, or are payments for services attracting deduction under Section 194C.

Which sections of the Income-tax Act were involved?

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

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Income Tax Appellate Tribunal, DELHI BENCH “B” NEW DELHI

Before: SHRI G.S. PANNU & SHRI RAVISH SOOD

For Appellant: Shri Rohit Jain, Advocate a/w, Ms. Somya Jain, CA
For Respondent: Shri Sumit Kumar Varma, Sr.D.R

PER RAVISH SOOD, JM

The present appeals filed by the assessee company are directed against the respective orders passed by the Commissioner of Income Tax (Appeals)-38, New Delhi [for short “CIT(A)”], dated 31.01.2020 and 10.1.2020, which in turn arises from the orders passed by the Assistant/Deputy Commissioner of Income Tax, Circle-73(1), Delhi u/ss. 201(1)/201(1A) of the Income Tax Act, 1961 (for short “Act”) for AY 2011-12 & AY 2012-13, respectively. As common issues are involved in the aforementioned appeals, therefore, the same were heard together and are being disposed off by way of a consolidated order. We will first take

The order continues below.

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