Johnson Watch Company Pvt. Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi held that assessee duly deducted TDS @2% u/s 194C Income Tax Act on payment of Common Area Maintenance (CAM) Charges as provisions of section 194I of the Income Tax Act is not applicable to this payment.
Facts- This appeal is filed by the assessee against CIT(A) order alleging that CIT(A) has erred by treating the common area maintenance charges (CAM) paid by the lessee to the maintenance company as part of the rent and making lessee is liable for deduction of tax at source under section 194 I at10% and not under section 194C at 2% in respect of such payment.
Further, assessee also alleges that CIT (A) has erred by observing that the lessor is paying the common area maintenance charges to the maintenance company and same are recovered by the lessor company from the lessee and such thus CAM are part of the rent and are liable for deduction u/s 194I @10% instead of deduction u/s 194C @2%.
Conclusion- We hold that the assessee was right in deducting tax @ 2% u/s 194C of the Act on payment of Common Area Maintenance charges and the provisions of section 194I of the Act is not applicable to this payment. Therefore, the assessee cannot be treated as an assessee in default and, thus, the assessee is not liable to pay any amount u/s 201(1) and u/s 201(1A) of the Act.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the assessee is directed against the order dated 16.01.2020 of the CIT(A)-38, Delhi, relating to Assessment Years 2011-12.
2. The grounds of appeal raised by the assessee read as under:-
“1. That the order of the learned CIT(A) is bad in law and on facts in confirming the order of AO in respect of following demands u/s 201(1) and u/s 201(1A) of the Income Tax Act, 1961:-
