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2014 (7) TMI 933 - AT - Service TaxDemand of service tax - Real estate agent service - Whether M/s. SRL have provided Real Estate Agent Service to M/s. SEL in terms of the Agreement between these two parties - Held that:- For a service to be covered under the definition of Real Estate Agent, it should be provided by a person to another person in relation to sale, purchase, leasing or renting of Real Estate. In the present case SRL, as indicated above in para 3, purchase/obtain lease of land in their own name. Further, they are not paid any commission by M/s. SEL. In fact the commission of 11% is received from the customers as consideration for the sale/lease, in addition to the cost of acquisition of land and other expenses. Thus, it cannot be said that they have provided any service to M/s. SEL in relation to purchase and further sale/lease of land to customers of M/s. SEL. As the definition of Real Estate Agent includes a real estate consultant, it needs to be examined whether the activity of M/s. SRL would come in the ambit of real estate consultant. From the fact on record advice is not provided by M/s. SRL to M/s. SEL. In fact, it is M/s. SEL, who provide technical inputs regarding suitability of land for wind farm projects, identify the suitable land and thereafter, as per the terms of the Agreement, ask M/s. SRL to acquire/lease such land. The land has to be free of any encumbrance before transfer of such land to the customers of M/s. SEL or to M/s. SEL themselves. All the regulatory approvals benefit the purchaser of land and expenses incurred thereon are recovered from the purchaser. Thus no real estate agent service can be said to have been provided by M/s. SRL to M/s. SEL. - Even the facilitation of loans by M/s. SEL to M/s. SRL for purchase of land and mortgage thereof is a financial arrangement between two which does not make M/s. SRL, real estate agent. Such financial arrangements and the exigibility to service tax thereof is not the issue here. The books of accounts of the appellants indicate that they hold large inventory of land. No consideration has been shown to be paid to M/s. SEL by M/s. SRL because no service is rendered by M/s. SRL to M/s. SEL. - M/s. SRL have not provided service of Real Estate Agent to M/s. SEL - Decided in favour of assessee.
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