Delhi High Court: Common Area Maintenance Charges Not Rent, No Tax Deducted at Source Applicable

The Delhi High Court has clarified that Common Area Maintenance (CAM) charges paid by a showroom to a mall cannot be treated as "rent" and are not liable to TDS under Section 1941 of the Income Tax Act.

A bench of Justices V. Kameswar Rao and Vinod Kumar dismissed the Revenue's appeal against Diamondtree Jewels, holding that CAM charges fall under Section 194C, which governs contractual payments, not rent.

The Court noted that such charges are independent of rental payments and cover maintenance services, not the use of premises.

Accordingly, the Revenue's appeal was rejected.

[Commissioner Of Income Tax-Tds-01 v Diamond Tree]