Glued Entertainment Pvt. Ltd. Vs ITO (ITAT Delhi)
In the case of Glued Entertainment Pvt. Ltd. vs ITO before the Income Tax Appellate Tribunal (ITAT), Delhi, the assessee appealed against an order dated 21.03.2025 issued by the Commissioner of Income Tax (Appeals), Prayagraj, for the assessment year 2017–18.
The assessee, a private limited company engaged in gaming and entertainment, had leased space in Logix City Centre Mall, Noida, from M/s Logix Buildtech Pvt. Ltd. under an agreement dated 03.08.2015. As per the lease terms, the assessee paid monthly rent and separate Common Area Maintenance (CAM) charges for upkeep and maintenance of shared areas such as parking, lifts, toilets, landscaping, and other facilities. During the relevant year, the assessee deducted tax at source (TDS) at 10% under Section 194-I of the Income Tax Act on rent, and at 2% under Section 194C on CAM charges, depositing both amounts to the Government and filing TDS returns accordingly.
The Assessing Officer (AO) concluded that CAM charges formed an integral part of the lease arrangement and were therefore part of the rent. On that basis, the AO held that TDS should have been deducted at 10% under Section 194-I instead of 2% under Section 194C, and treated the assessee as an assessee in default, computing interest of ₹95,660 under Section 201(1A). The assessee’s appeal before the CIT(A) was dismissed, leading to the present appeal before the ITAT.
