2018 (10) TMI 400 – CESTAT CHENNAI – TMI – Renting of immovable property – Joint ownership – clubbing of clearances – SSI Exemption – Department was of the view that since co-owners have an undivided share in the property, all the co-owners have to be treated as an association of person and the rental income has to be combined together – case of appellant is that that the department cannot consider all the four co-owners as an association of person so as to demand service tax by combining the rent by each co-owners.
–
Held that:- When the co-owners are treated individually, the amounts undoubtedly fall below the threshold exemption.
–
The Tribunal in the case of Sarojben Khulsanchand & Ors. Vs. Commissioner of Service Tax, Ahmedabad [2017 (5) TMI 240 – CESTAT AHMEDABAD], had considered the similar issue and held that The service Tax Registration of individual assessees for collection of service tax is PAN based, hence, collection of service tax from one of the co-owners, again
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
d separately for each co-owner for income tax purposes. Department was of the view that since co-owners have an undivided share in the property, all the co-owners have to be treated as an association of person and the rental income has to be combined together. When the rental income was combined in such manner, the amount exceeded the threshold limit and the appellants were therefore liable to pay service tax. Show cause notice was issued to the appellants proposing to demand service tax along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand of service tax of ₹ 10,06,867/- on the appellants along with interest under renting of immovable property service and also imposed penalties. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal. 2. On behalf of the appellant, ld. Consultant Shri G. Siva Kumar appeared and argued the matter. He submitted that the four appellants are co-owners and each have the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
; CE, Dehradun – 2018 (6) TMI 810 – CESTAT, New Delhi. b. Sh. Jasdeep Singh & Ors. Vs. Commissioner of Central Excise, Jalandhar – 201 (5) TMI 895 – CESTAT, Chandigarh 4. The ld. AR Shri K. Veerabhadra Reddy supported the findings in the impugned order. 5. Heard both sides. 6. The ld. consultant for the appellant has given the break-up of the share of each co-owners in the value of rent alleged n the show cause notice. It would show that the same would fall below the threshold exemption under SSI notification during the relevant period. The demand has been raised on all the coowners to treat them as association of person and levy service tax on the amount of rent received by them. When the coowners are treated individually, the amounts undoubtedly fall below the threshold exemption. The Tribunal in the case of Sarojben Khulsanchand & Ors. Vs. Commissioner of Service Tax, Ahmedabad – 2017 (5) TMI 240 had occasion to consider similar issue and observed as under:- 4. The learned A
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
o effect on Service Tax matters in which the service of renting of property is indivisible and the Appellants are liable to pay Service Tax on the gross value realised in providing the service. xxxx xxxx xxxx xxxx xxxx 9. We find force in the contention of the ld. Advocates representing the respective appellants inasmuch as association of persons‟ has been considered as a separate legal entity under the Income-tax Act for assessment and provided separate PAN number different from the PAN number possessed by individual co-owners; who joined together to form an association of persons‟. In the present case, the show cause notices were issued in many cases to one person among the Joint owners and in other cases to all the persons who had jointly owned the immovable property provided on rent. Needless to mention, the Service Tax Registration of individual assessees for collection of Service Tax is PAN based, hence, collection of Service Tax from one of the co-owners, against his
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
service provided by a service provider is ascertainable Service Tax is accordingly charged. This Tribunal in similar facts and circumstances in the cases of Deoram Vishrambhai Patel, Anil Saini & Others and Luxmi Chaurasia (supra) after considering the issues raised, rejected the contention of the Revenue and allowed the benefit of exemption Notification No. 6/2005-S.T., dt.1-3-2005 as amended to individual co-owners who jointly owned the property and provided the service of renting of immovable property, and received the rent in proportion to the shares in the immovable property. Similar issue was considered in the cases relied by the ld. consultant for the appellants. 7. Following the said decisions, we are of the considered opinion that the demand cannot sustain and requires to be set aside. The impugned order is set aside and the appeal is allowed with consequential relief, if any. (Operative portion of the order was pronounced in open court) – Case laws – Decisions – Judgeme
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =