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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 28.05.2025, passed by the Ld. Addl./JCIT(A)-1, Mumbai. In this case the Ld. AO passed an order u/s 201 of the Act by adding certain amounts by treating the assessee as being in default for non-deduction and short deduction of tax at source. The Ld. AO has also made an addition on account of non-deposit of tax deducted at source.
Aggrieved with this action, the assessee approached the Ld. Addl./JCIT(A), where also he could not succeed on the basis of rather cryptic findings on pages 6 and 7 of the impugned order.
Further aggrieved, the assessee has approached the ITAT with the following grounds of appeal: -
1.“That the CIT(A) erred in holding that TDS is deductible on the disputed rental and repair and maintenance services u/s 194I and 194C in an illegal way.
2.That the CIT(A), failed to reconcile the fact, that TDS under Chapter XVIIB, can be deducted only on crystallized provisions/expenses.”
Before us the Ld. AR presented a summary of the additions as under:
TDS Order 1622/31.03.23 demand Rs.450,133 173511 tax and Rs.276622 Interest CIT(A) order dated 28 May 2025 demand Rs.17.05 lakhs
S. No. Issue Amount Actual Amount on which deducted TDS deducted by Assessee Amount on which TDS not deducted or short deducted Default Interest @96 months Total Demand 1. Lease Rent u/s 194I @10% 19,01,372 11,62,280 1,16,280 7,39,092 73,909 70,952 1,44,861 2. P&M Repairsu/s 194C @2% 29,525 29,525 75 29,525 515 494 1,009 3. Repairs & Maintenance u/s 194C @2% 1,78,747 1,78,747 - 1,78,747 3,575 3,432 7,007 4. Swimming Pool Maintenance u/s 194J @10% 1,16,558 1,16,558 1,167 - 10,489 10,070 20,559 5. Lease Rent u/s 194I @10% 11,62,280 - - 11,62,280 1,16,280 1,60,394 2,76,674 4,50,110 It was the submission that Rs.7,39,092/- was lease rent paid on which no TDS was exigible. On P&M repairs, it was observed that the amount was below Rs.30,000/- and was thus below the statutory limit for TDS. Regarding the item under swimming pool maintenance and repairs it was observed that payments in aggregate were Rs.1,16,558/- and Rs.1,78,747/- but were made to different persons, each below the permissible limit u/s 194C(5) of the Act. Regarding the amount of lease rent (Rs.11,62,280/-) it was stated that this deal did not go through and the said amount was returned back.
The Ld. DR, on the other hand, relied on the orders of the authorities below.
We have considered the rival submissions, gone through the records before us and have also perused the paper book filed by the assessee. It is seen that the item of Rs.29,525/- (P&M repairs) is clearly below the limit prescribed in section 194C(5) of the Act and hence the addition made here is directed to be deleted. Secondly, the payments made under the heads repairs and maintenance and swimming pool maintenance would need to be examined for the quantum of individual payments. Thus, if individual payments are covered u/s 194C(5) of the Act, then the assessee would get relief. The Ld. AO is directed to examine these payments in the light of these observations. Thirdly, the two items of lease rent would be examined again on the basis of facts to be submitted by the assessee and the Ld. AO would give relief, if due, to the assessee.
To this effect we set aside the impugned order with respect to additions made under serial numbers 1, 3, 4 & 5, from the table extracted supra and remand the same to the Ld. AO for consideration in light of our observations above. The assessee gets relief on item number 2 from the said table (supra).
In the result, this appeal is partly allowed.