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Before: AND SH. ANUBHAV SHARS1A
ORDER
PER N. K. BIL3LAIYA, AM:
This appeal by the assessee is preferred against the order of the CIT(A)-38, Delhi dated 16-01-2020 pertaining to A.Y.2011-12.
The grievance of the assessee read as under :-
1) That the order o f the learned Commissioner o f Income Tax(Appeals) is against law and facts. 2) That in the facts and circumstances o f the case o f the appellant the order o f the learned Commissioner o f Income Tax(Appeals) in confirming the order o fA C IT relating to the issue that order o f learned ACIT in reprocessing the TDS return vide orders JL. 30.3.2018 in which orders u/s 201(1)/201(1A) had already been passed on 21.3.2013 which was a subject matter o f appeal without any comments is altogether, arbitrary, illegal and uncalled for.
3). That the order o f the learned Commissioner o f Income Tax(Appeals) in confirming the order o f ACIT relating to ground o f appeal that ■ the order o f the ACIT u/s 201(1)/201(A) is barred by time limitation without any specific findings is altogether against provisions laid under law and uncalled for.
4) That in the facts and circumstances o f the case o f the appellant the order o f the learned Commissioner o f Income Tax(Appeals) in confirming the order o f ACIT that appellant had made short deduction o f tax amounting to Rs. 5389724/- in respect o f share in common area maintenance to the against/ owners is against provisions laid under law, against judicial pronouncement arbitrary, illegal, void and uncalled for.
5) That the order o f the learned Commissioner o f Income Tax(Appeals) in confirming a finding on the ground o f appeal relating to charging o f interest u/s 201(1 A) amounting to Rs.423477/- is arbitrary illegal, void and uncalled for.
6. That appellant craves to amend and raise any ground o f appeal at the time o f hearing appeal.
At the very outset, the Counsel for the assessee referred to ground No.4 wherein the addition has been made -erf short deduction of tax in respect of share in common area maintenance has been challenged by the assessee.
Referring to the assessment order the Counsel pointed out that during the course of survey action it was found that the Ambience Group operating two malls, namely Ambience, Gurgaon and Ambience, Vasant Kunj was recovering,collecting expenses in the form of Common Area Maintenance CAM charges. The tenants have been deducting TDS @ 2% as per the provisions of section 194C of the Act.
The Counsel pointed out that during the proceedings under section 201 and 201A the AO was of the opinion that the TDS should have been deducted as per provisions of section 1941 of the Act @ 10% as CAM charges are part of rent. On this belief the assessee was directed to pay Rs.53,89,724/- and further directed to pay interest of Rs.42,34,477/-.
The assessee challenged the order before the CIT(A) but without any success.
Before us the Counsel for the assessee submitted that on identical set of facts in the case of other tenant in the same mall this Tribunal has deleted the addition. Copy of the order was supplied.
The DR could not bring any distinguishing decision in favour of the revenue.
We have given a thoughtful consideration to the orders of the authorities below. We find force in the contention of the Counsel. This Tribunal in order dated hej 15.02.2023 at the occasion to consider an identical grievance in \L the case of another tenant of the same mall and decided as under “7. We have carefully considered the orders o f the authorities below. The undisputed fact is that the impugned payment is not rent but common area maintenance charges paid by various tenants/ owners o f the shop to the mall owners. On this undisputed facts the decision o f the coordinate Bench (supra) clearly apply wherein the coordinate Bench has held as under “In sum and substance, only the payments for use of premises/equipment is covered by Section 194-1 of the Act. In our © considered view, as the CAM charges are completely dependent and separate from rental payments, and are fundamentally for availing common area maintenance services which may be provided by the landlord or any other agency, therefore, the same cannot be brought within the scope and gamut of the definition of terminology “rent”: On the other hand, we are of the considered view, that as the CAM charges are in the nature of a contractual payment made to a person for carrying out the work in lieu of a contract, therefore, the same would clearly fall within the meaning of “work” as defined in Section 194C of the Act. In our considered view, as the CAM charges are not paid for use of land/building but are paid for carrying out the work for maintenance of the common area/facilities that are available along with the lease premises, therefore, the same could not be characterized and/ or brought within the meaning of “rent” as defined in Section 194-1 of the Act. 13. In the backdrop of our aforesaid deliberations, we concur with the claim of the Id. AR that as the payments towards CAM charges are in the nature of contractual payments that are made for availing certain services/facilities, and not for use of any premises/equipment, therefore, the same would be subjected to deduction of tax at source u/s. 194C of the Act. Our aforesaid 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 o f 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.i94 c 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 aforesaid deliberations, and respectfully following the aforesaid order of the Tribunal, we herein conclude, that as claimed by the assessee, and rightly so, the CAM charges paid by it were liable fo r deduction of tax at source @2%, i.e., u/s.i9 4c of the Act. We, thus, in terms of our aforesaid observations set-aside the order of the CIT(A) who had approved the order passed by the AO treating the assessee company as an assessee-in-default u/s.201(1) o f the Act. The Grounds of appeal no A to 4.5 are allowed in terms of our aforesaid observations.”
Respectfully following the decision o f the coordinate 8. Bench (supra) we direct the AO to delete the impugned addition. The appeal o f the assessee is allowed.”
On finding parity of facts, respectfully following the decision of the coordinate Bench we direct the AO to delete the impugned additions.
In the result, the appeal of the assessee is accordingly allowed.