Case Law Details
Liberty Retail Revolutions Ltd. Vs ACIT (ITAT Delhi)
Introduction: In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Delhi has addressed the applicability of Tax Deducted at Source (TDS) under section 194C of the Income Tax Act on Common Area Maintenance (CAM) charges. The case pertains to Liberty Retail Revolutions Ltd. vs ACIT for the assessment year 2011-12. The appeal challenges the order of the CIT(A)-38, Delhi dated 16-01-2020.
Detailed Analysis: The crux of the matter revolves around the contention that the Assessing Officer (AO) directed the assessee to pay TDS at a higher rate (10%) under section 194I of the Act, treating CAM charges as part of rent. The AO argued that the TDS deducted by the assessee at the rate of 2% under section 194C was inadequate. The dispute also included interest levied on the alleged shortfall in TDS.
The assessee challenged this order before the CIT(A), raising multiple grounds, including the assertion that CAM charges were not rent and thus, section 194I was not applicable. The CIT(A), however, confirmed the AO’s order.
During the proceedings, the assessee referred to a similar case involving another tenant in the same mall. In that case, the ITAT Delhi had deleted the addition related to TDS on CAM charges. The counsel for the assessee argued that the facts were identical, and the decision in the other case should apply.
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