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Further t hat a s um of Rs. 2,16,90,806/- was deducted by t he AAI on account of purporte d Land Rent from the Running Account (RA) bills. Thus, the Appellant was receiving the balance mone y after deduction from the monthl y running account bills and was not actually making payments to the AAI. The rent charged by the AAI has bee n dis puted by the Appel lant before the Disputes Resol ution Board and AAI had also approache d t he Arbitrator f or resol uti on of t he matter. T he issue is still being contested before the District Judge by the Appel lant . However the Rent has been charged under Clause 26.1 of the Special Conditi ons of Contract. Now even t hough t his issue is bei ng di sputed the AA I has been de duct ing the amounts in questi on from the 15 t h Running Bil l onwar ds of t he Appellant. Now these am ounts have been considered by the AO to be towar ds rental charge d by the AAI from the Appel lant and the refore li able for deduction of TDS, even though admitte dl y the amounts were directly de duct ed by A AI from the Running Bil ls and then payme nt releas ed to it. The first conte ntion of the A ppe llant is that the amount deducted by the A AI was dis puted, secondly it was not i n the nat ure of payment cov ered by section 194I and that it s ince the funds were not i n control of the Appel lant and amount deducted directly from its RA Bi lls, i t coul d not have de ducted TDS and lastly that since the payme nt would have been disclose d by AAI in its income as it was a Government enterprise, the Appellant could not be held to be "assessee in default " for non deduction of TDS on the same. W hile from the facts and evidences on this issue i t is clear that the amounts in question were being deducte d by t he AAI from the Runni ng Bills of the Appell ant tow ards 'rent' as per ter ms of the contract wit h the Appellant, however the quantum charge d by the AAI has bee n dispute d by the Appel lant and the fi nal Arbitral Award was in fav our of the AAI, which has bee n challe nge d by the Appellant before the District Judge of Barasat. It is also seen that there was no separate agreeme nt f or payme nt of Re ntal by the A ppe llant and the same is flowing out of Cons oli dated Contract for construction of the Airport Terminal awar ded to the Appel lant. Whi le t he charges r aised by t he AAI may be i n dispute, the issue is whether the s ame whether the Appel lant is liable for TDS under section 194I on the de ducti on of 'Rent' by the AAI from the bills of the Appellant. Here if the appli cability of t he decision in CIT vs NIIT 318 ITR 289 is considered it has been hel d regar ding the deducti on of TDS u/s 194I, that the Compos ite Agreeme nt coul d not be broke n upto apply se ction 194I. It has been hel d by the Delhi High Court as under:

"7. Reading of t he agreement therefore clearly shows that the agreement was in fact a franc hisee agreement and it cannot be said t hat by the agre ement, rent was i n fact being pai d by the assessee-company to the l ice nsee. No doubt, the charges have been broken up under two heads viz., that of, marketi ng claim and infrastructure claim. Howe ver, the agreement is an agreement as a whole and such a composi te agreeme nt cannot be broken up as it s ought to be done and c ontended by the revenue . The provision of section 194I cannot be read to break up composite contracts and when that is not t he intention of the parties themselves. If, the i nterpretation of the Reve nue i s accepted then, in a case where there is a partnership and one of the part ner brings in his capit al i n the form of his premises from where the par tnership business is carried on, t hen, payment made to s uch partner by the firm can be stretched to be i ncl uded in t he definition of rent under section 194I and which surely cannot be the intention of t he Legisl ature"

Furthermore in the case of Nat ional Panasonic Indi a Ltd. it has clearly been hel d by the ITAT Delhi as under:
6. We have duly considered the ri val contentions and the material on re cord. Se ction 194I of the Act mandates a person, other than an individual or a Hi ndu Undivided F ami ly (HUF) paying rent to a resident to deduct tax at s ource at the t ime of credit or payme nt, whichever is e arlier, Clause (i) of the Explanation to sect ion 194I gives the meaning of 'rent' to be a payment under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (i ncluding factory building), toget her with furniture, fitti ngs and the land appurtenant t hereto, whether or not s uch building is owned by t he payee. Thus, 'rent' for the purposes of section 194I, is essent ially a payment for the use of any land or building. In other words, the agreement or arrangement whi ch gives rise t o the payment of rent, must necess arily be an agreement or arrangement predominantly f or the use of land or building. However, where the agreement is not predominant ly for the use of land or building, but for something else, the n payment under that agreement will not constitute re nt eve n if that 'somet hing else' involves the use of land or bui lding as an integr al part of or incide ntal to the predominant objective of the agreement.
8. Heard rival submissions and perused the relevant material available on record. We find that the CIT(A) held the impugned amount does not constitute rent which attracts deduction of TDS under section 194I of the Act by placing reliance on the decision of Hon'ble High Court of Delhi in the case of CIT vs NIIT reported in 318 ITR 289.
9. We note that the CIT(A) placed reliance on the decision of Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage Pvt. Ltd. reported in 293 ITR 226 and held that the assessee is not in default for non-deduction of TDS as the payment alleged to have been paid to AAI was in turn offered by AAI as income in its account and paid the tax. In view of the ratio laid down by the Hon'ble High Court of Delhi in the case of NIIT (supra), we hold that the amounts alleged to have been paid to AAI does not constitute rent, therefore the application of provisions under section 194I does not arise at all. Even otherwise we are in agreement with the opinion rendered by the CIT(A) in placing reliance in the case of Hindustan Coca Cola Beverage (supra), assessee cannot be held in default as the recipient AAI is a Govt. Public Sector Enterprise which is stated to have offered this receipt to tax.