TDS u/s 194I OR 194C - deductibility of the tax on the entire payment as rent or to be segregated into rent and CAM

ITAT DELHI

YUM RESTAURANTS INDIA (P) LTD. VERSUS ACIT (TDS) , CIRCLE-78 (1) , NEW DELHI,.- ITA No. 1115/Del/2020

Dated.- October 3, 2022

HELD THAT:- 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 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 - AO is directed to re-compute the CAM charges, taking into consideration the two sections mentioned above.