Case Law Details
Paramount Restaurants Pvt. Ltd. Vs CIT (A) (ITAT Delhi)
Merely because a single agreement is executed between lessor and lessee creating liability on lessee for both rent and CAM charges does not discard the distinguishing nature of the two payments. As for the Rent and Eviction Laws the two may have no difference but under „the Act’, they are different head of expenditures of the lessee. The „rent’ is on account of „use’ of the property given into a exclusive possession of the lessee for the running of business but the CAM charges are for maintenance of the common areas, used or not used by the lessee. There is no reason to distinguish between the nature of two payments made by the lessee to the lessor if lessor keeps rent to himself and the CAM charges are paid further by the lessor unless there is composite rent, inclusive of the CAM.
While the lease rentals are paid based on a fixed percentage on the net revenue, the CAM charges are based on the per sq . ft. area. The observation of the ld . CIT(A) is that the rent by any name , lease , sub-lease , tenancy or the reliance on the judgment wherein the services are intrapolated into the rent stand on a different pedestal. In the instant case, the determination of the rent or CAM are separate and the CAM arrangements are not essential and an integral part for use of the premises. While there are no expenses incurred against the rent except for general building maintenance and municipal charges , the CAM involves employment of separate staff and separate operations involved on day to day basis. Hence, we hold that the provisions for rent are governed by Section 194I and CAM charges by Section 194C of the Act. The AO is directed to recompute the CAM charges, taking into consideration the two sections mentioned above.”
In the light of the aforesaid discussion, the bench is of considered opinion that Ld.c Consequently the grounds raised by the assessee are allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
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