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2024 (7) TMI 1573 - AT - Service TaxLiability of co-owners to pay service tax on aggregate amount of sum total of rent received in regard to the co-owned property - co-owners of a property leasing it out are considered independent service providers for the purpose of service tax liability or not - Applicability of the threshold exemption limit under N/N. 6/2005-ST as amended by N/N. 8/2008-ST to each co-owner individually - HELD THAT - There is no dispute that the immovable property is co-owned by both the appellants and the rent was received from Punjab National Bank (lessee) equally to both the co-owners. In this fact both the co-owners are to be treated as independent service provider. Therefore individually each appellant received rent for the financial year involved in the entire period of this case is much below the threshold limit of exemption under N/Ns. 6/2005-ST dated 01.03.2005 and No. 8/2008-ST dated 01.03.2008 therefore service tax demand will not sustain. This issue has been considered time and again in various judgements - reliance can be placed in Sarojben Khushalchand versus Commissioner of Service Tax Ahmedabad 2017 (5) TMI 240 - CESTAT AHMEDABAD where it was held that it is difficult to accept the proposition advanced by the Revenue that all the co-owners providing the service of renting of immovable property be considered as an association of persons and the service tax on the total rent be collected from one of the co-owners . It is found that the ground of appeals stated by Revenue in the said appeal is before me are only about what constitutes association of persons . There are no ground which establishes that the eight individuals who are respondents can be called association of persons through any definition provided by any law when they have not entered into any agreement to form association of persons . Even the definition of person in Section 3(42) of the General Clauses Act 1897 states that person shall include any company or association or body of individuals. So since the definition is inclusive there has to be an association of individuals to become person under said Section 3(42) of the General Clauses Act 1897. The impugned order is set-aside and the appeal is allowed.
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