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2014 (8) TMI 710 - AT - Service TaxBanking and other Financial Services - taxability of lease rent - finance lease agreement - Held that:- According to the Accounting Standards for Financial Lease published by ICAI, a lease is classified as a financial lease, if there is an option for transfer of asset to the lessee at the end of the lease period. Besides this, in a financial lease, lease period is almost the entire economic life of the asset. Though during the period of dispute, the term, "Financial Lease" was not defined in Section 65(12) of the Finance Act, as held by the Tribunal in the case of Commissioner of ST Vs. Lufthansa Technik Service India Pvt. Ltd. reported in [2013 (12) TMI 968 - CESTAT NEW DELHI] in absence of the definition of this term, the same must be interpreted in the sense it is understood in the common parlance or trade parlance and accordingly, this term is to be understood according to its meaning in the ICAI Accounting Standard or International Accounting Standards. There is absolutely no element of financing and the agreements, in question, are purely the agreements of renting of immovable property(plant & machinery) which became taxable under Section 65(105)(zzzz) of the Finance Act, 1994 w.e.f 1.6.2007. Therefore, during the period of dispute, the renting of plant & machinery by the appellant under lease agreement/licence agreement was not taxable as Banking and Financial Services under Section 65(105) (zzm) read with Section 65(12) and as such, the impugned order is not sustainable - Decided in favour of assessee.
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