The appeal by Kapoor Watch Company Pvt Ltd challenges the order by CIT(A)-38, Delhi concerning the financial year 2010-11. The crux of the dispute lies in the TDS deductions on common area maintenance (CAM) charges, which were argued to be part of rent and thus subject to higher TDS rates under Section 194I instead of Section 194C.
The appellant contested the assessment on grounds that the imposed TDS rates were incorrect, claiming that the CAM charges should not be treated as rent. They relied on judicial precedents to support their position that payments for services distinct from rent should not attract rent-specific TDS provisions.
The Tribunal noted that the CAM charges were distinct from the rental payments made to the property owner and were paid directly to service providers, thus falling under the purview of Section 194C. The reference to the Punjab & Haryana High Court’s ruling was found inapplicable to the facts of this case.
The Tribunal’s decision to side with the appellant has implications for businesses in similar tenancy arrangements, clarifying the applicability of TDS provisions on distinct payments made under commercial leases.
ITA 889/DEL/2020: Kapoor Watch Company Pvt Ltd vs ACIT – TDS Dispute Over CAM Charges
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform