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2018 (12) TMI 256 - AT - Service TaxValuation - inclusion of notional interest of the security deposit in assessable value - Renting of Immovable Property Service - Held that:- The agreement between the appellant and M/s Granada Services Pvt. Ltd. was entered into in the month of November, 2004 much before the activity was covered by levy of service tax, therefore, it cannot be held that to evade service tax the parties have entered into an agreement to have low rent and high security deposit. Whether security deposit was with appellant or not the rent remained the same which was ₹ 5,000/- per month during the period when security deposit was with the appellant and subsequently even when security deposit was refunded and even when the entry of taxable service was yet to be entered into the Statute - thus the security deposit did not influence monthly rental. Tribunal in the case of K. Raheja Corporation Pvt. Ltd. [2015 (2) TMI 886 - CESTAT MUMBAI] has held that notional interest on security deposit cannot be added to rent agreed upon between the parties for the purpose of levy of service tax for renting of immovable property. There was no reason to add notional interest in the monthly rent for the purpose of assessment of service tax - appeal allowed - decided in favor of appellant.
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