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2018 (8) TMI 1174 - CESTAT MUMBAINature of activity - Renting of Immovable Property Services or not - provision of the space for setting up the stores - consideration by way of amount calculated as percentage on the basis of net sales during the year - case of appellant is that they are not providing any taxable service and the agreements entered by them with M/s Pantloon & M/s Trent were for profit sharing - Whether the agreements between the appellant and M/s. Pantaloons and M/s. Trent Ltd. can be treated as agreement for renting of space or are these agreements only for profit sharing? - extended period of limitation - penalty. Held that:- The appellants have provided the space to the said companies for conducting report of business and for provisions of the said space. They are receiving certain “Fees”, the said “Fees” cannot be anything other than as charges for provision of the space, hence is in nature of rent - The submission made viz-a-viz the other activities being undertaken by the appellant in terms of the said agreement do not justify to consider the amount received as anything other than rent because in view of the clause (4(b) of the agreement which specifically provides that “The company shall be exclusively in charge of the management and running of the said business from the said premises”. The conduct of retail business from the said premises was so responsible of the company which had necessary expertise in doing so. This is also supported by the fact that appellants are neither having necessary expertise/experience in the field of retail sales of the said product - the entire amounts received in terms of these agreements are nothing but rent for providing space for conducting the said retail business. Time limitation - Held that:- There is no doubt that appellants had not disclosed the facts with regards to said two agreements to the department the other these facts which were in the knowledge where exclusively no disclosed hence suppressed. Accordingly, there is no denial that extended period has to be invoked for demanding the tax short paid - when vital facts for determination of the tax liabilities have been suppressed from the department invocation of extended period of limitation cannot be faulted with. Demand of Interest - Held that:- Since taxes has not been paid when the demand of interest cannot be set aside. It is a settled law that interest is an absolute liability cannot be waived in any circumstances - demand of interest upheld. Penalties - Held that:- Since in the present case tax has been evaded by resorting to fraud, suppression, mis-statement etc. penalty under Section 78 is justifiable - penalty u/s 76 also upheld - For failure to file proper returns penalty has been imposed under Section 77, which is also upheld. Appeal dismissed - decided against appellant.
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