Case Law Details
BIBA Apparels Private Ltd. Vs ACIT (TDS) (ITAT Delhi)
ITAT Delhi held that as payment of rent and common area maintenance charges is made to distinct entities/ companies, TDS @10% u/s 194-I is deductible in case of payment of rent and TDS @2% u/s 194C is deductible in case of payment of Common Area Maintenance charges.
Facts- The main issue involved in the present case is that CIT(A) has uphold the action of TDS officer directing to withhold TDS at the rate of 10% under section 194-I in relation to Common Area Maintenance (CAM) charges instead of 2% as deducted by the assessee under section 194C of the Income Tax Act.
Conclusion- From the material available on record, it is clearly discernible that the assessee company has paid rent to the owner after deduction u/s 194-I of the Act @ 10% and the payment for operation/maintenance was made directly to the service provider company after deduction of tax u/s 194C of the Act. Therefore, we are inclined to hold that in the present case the common area maintenance charges was not forming part of the actual rent paid to the owner by the assessee company. Payments of rent and common area maintenance charges have been made to distinct entities/companies, therefore, the authorities below were not right in creating the impugned liability payable by the assessee firm under the provisions of subsections (1) and (1A) of section 201 of the Act.
FULL TEXT OF THE ORDER OF ITAT DELHI
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