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2024 (2) TMI 820 - AT - Service TaxRenting of immovable property service - Liability of Appellant (Partnership Firm) is liable to discharge service tax on property jointly owned by parents of the Appellant Firm - benefit of SSI Exemption under notification No. 06/225-ST dated 01.03.2005 - denied to the co-owners of jointly owned property on the ground that aggregate value of service (rent arising from the said property is beyond threshold limit, regardless of the fact that rent received by each of the co-owners’ was much lower than the threshold limit - HELD THAT:- There is no dispute that irrespective of any agreement of RM with the present appellant the rent was paid by RM individually to the co-owners and TDS from the amount payable was deducted by RM. No amount was received by the appellant being a partnership. In this case the person who received the amount of rent directly from RM shall be treated a person liable to pay Service Tax. However, since the total receipt of rent by individual is less than the threshold limit as provided under exemption notification No. 6/2005/ST dated 01.03.2005 co-owners are not liable to pay Service Tax. This issue has been considered time and again in various judgments. It is settled that even though for one single property if the co-owners are receiving the rent individually in their account the total rent cannot be considered as one for levy or Service Tax. Every individual who receive the rent as co-owners he should be treated as individual Assessee and if the total receipt does crosses threshold limit of exemption they are liable to pay Service Tax otherwise not. Applicability of judgement in the case of Gtail Corporation - HELD THAT:- As regard the judgment relied upon by the revenue in the case of Gtail Corporation, on going through the same, it is found that in that case the fact are totally different in as much as the rent was first received by the partnership firm and subsequently the partnership firm has distributed amount of rent to individual partners. Accordingly, it is a firm who is the recipient of the rent and thereafter individual share has been distributed. Whereas, in the present case it is not the appellant (partnership firm) received the rent but the rent was directly received by individual in their account. Therefore, the ratio of the judgment in the case of Gtail Corporation is not applicable being its fact is totally different - the ratio of the judgment in the case of Gtail Corporation is not applicable being its fact is totally different. The demand against the appellant who is not the recipient of the rent cannot be sustained - the impugned order is set aside. The appeal is allowed.
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