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Whether payments made to a hotel for rooms hired during the year would be of the nature of rent?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked over 2 years ago

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

In the case of Krishna Oberio v Union of India [2002], it was decided that where the assessee was running a five-star hotel, and had entered into regular agreements with some corporate customers under which the assessee provided rooms to those customers at a concessional rates

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Pushkala Santhanam answered over 2 years ago

In the case of Krishna Oberio v Union of India [2002], it was decided that where the assessee was running a five-star hotel, and had entered into regular agreements with some corporate customers under which the assessee provided rooms to those customers at a concessional rates, the High Court held that the amounts paid by such customers was to be treated as 'rent' and subjected to deduction of tax at source. In lines with the above decision, the CBDT has clarified that payments made to a hotel for hotel accommodation , whether in the nature of lease or license agreements are covered under section 194-I, so long as such accommodation has been taken on 'regular basis'.

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Picsjoin 2017224123730582 Archana answered over 2 years ago

Hie Uma, - Payments made by persons, other individuals and HUFs for hotel accommodation taken on regular basis will be in the nature of rent subject to TDS under section 194-I. Circular: No. 715, dated 8-8-1995.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered over 2 years ago

Payments made by persons, other individuals and HUFs for hotel accommodation taken on regular basis will be in the nature of rent subject to TDS under section 194-I. Circular: No. 715, dated 8-8-1995. Thanks

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