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2019 (6) TMI 1146 - CESTAT NEW DELHIReal estate agent service - absence of consideration - contract between parties is of principal to principal relationship or agent to principal - Liability of service tax - Suppression of facts or not - extended period of limitation - imposition of penalties. - Valuation - Inclusion of Cost of land, which has been acquired and transferred to the Sahara India. HELD THAT:- There is no consideration defined and/or provided for the alleged service. In absence of any defined consideration for service, there is no contract for service. Under the facts and circumstances, we find that the appellant entered into an agreement of trading in land, wherein they agreed to transfer, a measurement or area of land, in a particular area in favour of the Sahara India. Such land was to be arranged by them by way of procurement from the land owners. The appellant was also obligated to examine the title of the prospective land owner and to further ensure the availability of land owner at the office of the Registrar for execution of the sale deed. In fact Sahara India instead of paying the price directly to the land owner, paid lump sum amount to the appellant. From the perusal of Memorandum of Understanding (MoU) between the appellants and M/s Sahara India Ltd. It is very obvious that MoU is not only for providing purely service for acquisition of the land, but involves many other function such as verification of the title deeds of the persons from whom the lands are to be acquired and obtaining necessary rights for development of the land from the Competent Authority. The remuneration or payment for providing this activity, has actually not being quantified in the MoU. The MoU provides that, “the difference, if any, of the amount being actually paid to the owner of the land and the average rate shall be payable to the second party (appellant)”. It is very clear from the provision of the MoU that the amount payable to the appellant is not quantified and it is more of in the nature of margin (profit/loss). We hold that for levy of service tax, a specific amount (consideration for service) has to be agreed between the service recipient and the service provider. As no fixed amount has been agreed in the MoU which have been signed between the parties, the amount of the remuneration for service, if any, is not clear in this case. Since the specific remuneration has not been fixed in the deal for acquisition of the land, we are of the view that both the parties have worked more as a principals in the deal, rather than as an agent and the principal. Extended period of limitation - penalty - HELD THAT:- The issue relates to interpretation, and there is no malafide on the part of the appellant. The transaction is through banking channel and duly recorded in the books of accounts maintained by the appellant(s). Further there is no suppression of information from the revenue. Accordingly, the extended period of limitation is not applicable. Appeal allowed - decided in favor of appellant.
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