10 January 2013
If a company made a contract with a hotel to provide accomadation to it's costumer /guest ect. then on such payment, under which sec. tds should be deducted...??? either u/s 194C or 194I .........???
If the hotel received payments from corporate customers under an agreement for use of the rooms in the hotel by such customers on regular basis, such payments would squarely fall within the term ‘rent’ as defined under the Explanation to section 194-I, and would hence attract deduction of tax at source. - Krishna Oberoi v. Union of India [2002] 257 ITR 105/123 Taxman 709 (AP.).
The CBDT have clarified that, while section 194-I would be attracted to payments received for providing hotel accommodation on a regular basis under lease/licence agreements, the said provision would not apply to cases where only ‘rate contract’ agreements are entered into, under which only room tariffs are fixed, because, where an agreement is merely in the nature of a rate contract, it cannot be said to be accommodation ‘taken on regular basis’
CAclubindia
