Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2014 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (9) TMI 461 - AT - Service TaxRenting of immovable property - Valuation - inclusion of Notional Interest on Security - revenue contended that notional interest @ 18% of the deposit should be added to the rent received and service tax should be demanded on the notional interest on the security deposit - Held that:- there is not even an iota of evidence adduced by the Revenue to show that the security deposit taken has influenced the price i.e. the rent in any way. In the absence of such evidence, it is not possible to conclude that the notional interest on the security deposit would form part of the rent. We also do not find any reason for adopting a rate of 18% per annum as rate of interest, which is neither the bank rate of interest for deposits or loans or the market rate of interest. Adoption of such an arbitrary rate militates against the concept of valuation. Notional interest on interest free security deposit cannot be added to the rent agreed upon between the parties for the purpose of levy of service tax on renting of immovable property. - Decided in favor of assessee.
|