2018 (10) TMI 401 – CESTAT CHENNAI – TMI – Renting of immovable property Service – inherited property – SSI Exemption – Association of persons – Held that:- The demand has been raised on all the co-owners to treat them as association of person and levy service tax on the amount of rent received by them. When the co-owners are treated individually, the amounts undoubtedly fall below the threshold exemption.
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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, against his individual Registration for the total rent received by all co-owners separately, is neither supported by law nor by laid down procedure. Thus, it is difficult to accept the proposition advanced by the Revenue that all the co-ow
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es were issued for the period April 2008 to March 2012 and April 2012 to March 2013 respectively and statement of demand dated 6.3.2015 issued covering the period from April 2013 to March 2014. After due process of law, the original authority confirmed the demand along with interest and imposed penalties under sections 76, 77 and 78 of the Finance Act, 1994. In appeal, Commissioner (Appeals) upheld the same. Hence these appeals. 2. On behalf of the appellants, ld. counsel Shri V. Ravindran appeared and argued the matter. He submitted that the appellants are individuals, mother, father, daughter and son. They inherited undivided individual shares in the immovable property which was rented for commercial purposes long years before renting was brought within the taxable services. They received rent individually albeit under a single lease deed and paid income tax. For service tax, the only rent received by each of them was less than the threshold limit. When the limit crossed in 2014 – 15
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ew Delhi. b. Sh. Jasdeep Singh & Ors. Vs. Commissioner of Central Excise, Jalandhar – 201 (5) TMI 895 – CESTAT, Chandigarh 3. The ld. AR Shri K. Veerabhadra Reddy supported the findings in the impugned order. 4. Heard both sides. 5. The demand has been raised on all the co-owners to treat them as association of person and levy service tax on the amount of rent received by them. 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 had occasion to consider similar issue and observed as under:- 4. The learned Authorized Representative for the Revenue reiterates the findings of the lower authorities. It is his contention that the learned Commissioner after taking into consideration the percentage of share of individual co-owners in the property against the total area owned and leased observed that the entire immov
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lants 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 individual Registration for the total rent received by all coowners separately, is neither supported by law nor by laid down procedure. Thus, it is difficult to accept the proposition advanced by the Revenue that all the coowners providing the service of renting of immovable property be considered as an association of
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