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TMI BlogRenting of a building for a hotel, is not liable to Service tax under Renting of immovable property’ servicesX X X X Extracts X X X X X X X X Extracts X X X X ..... Renting of a building for a hotel, is not liable to Service tax under Renting of immovable property’ services X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Jai Mahal Hotels (P.) Ltd. Vs. Commissioner of Central Excise, Jaipur [2014 (7) TMI 540 - CESTAT NEW DELHI] on the following issue: Issue: Whether the 'Renting of a building for a hotel', is liable to Service tax under 'Renting of immovable property' services? Facts and background: Jai Mahal Hotels (P.) Ltd. ("the Appellant") entered into a joint venture agreement dated August 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1985 with Indian Hotels Company Limited ("IHCL") for running hotel business at immovable property owned by the Appellant. The Department contended that the Appellant had provided the taxable service namely 'Renting of immovable property', defined in erstwhile Section 65(90a) read with Section 65(105)(zzzz) of the Finance Act, 1994 ("the Finance Act"). Accordingly, demand of Service tax along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h interest and penalty was confirmed against the Appellant for the period from June, 2007 to March, 2010. Being aggrieved, the Appellant filed an appeal before the Hon'ble CESTAT, Delhi arguing that 'hotel buildings' were not covered under taxable service in view of the exclusion clause under Section 65(105)(zzzz) of the Finance Act and even otherwise, there was no provision of service, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s there was a joint venture. Held: The Hon'ble CESTAT, Delhi after analyzing exclusionary and inclusionary clauses under Explanation I to the erstwhile Section 65(105)(zzzz) of the Finance Act, held that as per Explanation 1(d) to erstwhile Section 65(105)(zzzz) of the Finance Act, 'immovable property' does not include buildings used for purpose of accommodation, including hotels. Hence, buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs used for, or as, hotels do not amount to immovable property. Therefore, renting of a building for a hotel i.e. buildings used for purpose of accommodation including hotels is covered by exclusion clause and does not fall within ambit of taxable service namely 'Renting of immovable property'. The alternative argument of the Appellant as regards joint-venture was not discussed and the matter wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decided in favour of the Appellant relying upon the provisions under Section 65(105)(zzzz) of the Finance Act. Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us. Thanks and Best Regards, Bimal Jain FCA, FCS, LLB, B.Com (Hons) Delhi: Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I, Delhi - 110091, India Desktel: +91-11-22757595/ 42427056 Mobile: +91 9810604563 Chandigarh: H. No. 908, Sector 12-A, Panchkula, Haryana - 134115 Kolkata: Ist Floor, 10 R G Kar Road Shyambazar, Kolkata - 700 004 Email: [email protected] Web: www.a2ztaxcorp.com Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in prepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission. Reply By Kamal Jhanwar as = What will be he position after 1.7.2012 post negative list regime in such matters. Dated: 29-1-2015 Reply By Deepak Aggarwal as = Hello Sir, Please e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplain post 1/7/2012 picture in light of this judgment.
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