TMI Blog2019 (5) TMI 1485X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal income by every individual is only subject to liability of service tax - If the value is below thresh-hold exemption limit in case of any individual, the same will not be taxable being exempted under Notification No. 06/05-ST dated 01.03.2005. At the same time in case of any individual person if the thresh-hold limit exceed in financial year, the same will be liable for service tax. The issue decided in the case of SAROJBEN KHUSALCHAND OTHERS VERSUS C.S.T. -SERVICE TAX - AHMEDABAD [ 2017 (5) TMI 240 - CESTAT AHMEDABAD ] where it was held that the ownership of the Property and providing of taxable renting of immovable Property by the four appellants in this case is in their individual capacity and, therefore, their tax liability should have been determined by considering their individual rental receipts and not collective one. Service tax liability do not arise - appeal allowed - decided in favor of appellant. - Misc. Application No. ST/ORS/10066/2018-DB In ST/502/2012, ST/10247-10248/2013, ST/12927/2014, ST/10473-10478/2015, ST/11984-11987/2016, ST/10923-10931/2017-DB - A/10712-10734/2019 - Dated:- 16-4-2019 - MR. RAMESH NAIR, MEMBER (JUDICIAL) And MR. RAJU, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Final Order No. 52131-52134/2018 Delhi CESTAT T. Parivallal others Final Order No.42535-42537/2018 Chennai CESTAT 3. Sh. G. Jha Ld. Superintendent (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. Heard both the sides and perused the records. We find that though in respect of one property, there are joint owner but each joint owner is independent in respect of ownership of respective shares, therefore, whatsoever consideration received by an individual, it is the subject matter of taxation in respect of that individual person either as per income tax or as per service tax. Rental income of other co-joint owner cannot be considered. Therefore, in our considered view receipt of rental income by every individual is only subject to liability of service tax. If the value is below thresh-hold exemption limit in case of any individual, the same will not be taxable being exempted under Notification No. 06/05-ST dated 01.03.2005. At the same time in case of any individual person if the thresh-hold limit exceed in financial year, the same will be liable for service tax. This issue has been considered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty and provided the service of renting of immovable property, and received the rent in proportion to the shares in the immovable property. 10. In the result, the impugned orders are set aside and the appeals are allowed with consequential relief, if any, as per law. In the case of Deoram Vishrambhai Patel (Supra), Tribunal has passed following order: 6. We have considered the submissions made by both sides and perused the records. The issue that needs to be decided in this case is whether the respondent and his brothers are to be treated as association of persons or other vise and service tax liability on it arises, should be confined without the benefit of the Notification No. 6/2005-S.T. 7. It is undisputed that the property which has been rented out by the respondent and his brothers is jointly owned property; Service Tax liability arises on such renting of property. 8. On deeper perusal of impugned order, we find that the first appellate authority has considered all the angles in the dispute and came to the correct conclusion. The findings of first app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009-10 ₹ 46,72,744/- 4 2010-11 ₹ 52,63,304/- 5 2011-12 ₹ 44,28,360/- But as the rent was distributed equally among each of the appellant, it is evident that each of them received an amount lesser than ₹ 8 lakhs and 10 lakhs in the years 2007-08 and 2008-09 respectively which is below the exemption limit of eight lakhs and ten lakhs during the relevant period. The appellants were, therefore, not liable to pay service tax on the amounts received by them during these two years by virtue of Notification No. 6/2005-S.T., dated 1-3-2005. The appellant s case is also supported by the Tribunal s decision in the case of Dinesh K. Patwa v. CST, Ahmedabed which is referred in Para 3(ii) above. However, in the Financial Year 2009-10 and 2010-22, the receipt off rent by each appellant exceeded the statutory exemption limit of ₹ 10 lakhs and the appellants have paid service tax along with interest on their own before re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact no SCN was required to be issued in this case for recovery of service tax and imposition of penalty and even when it has been issued, no penalty under Section 76 or 78 is imposable in this case for the period 2009-10 and 2010-11. 9. It can be seen from the above reproduced findings of the first appellate authority, the conclusion arrived at is very correct, as co-owners of the property cannot be considered as liable for a Service Tax jointly or severally as Revenue has took identify the service provider and the service recipient for imposing service tax liability, which in this case, we find our individual. The conclusion arrived at by the first appellate authority is correct and he has confirmed the demand raised on the respondents by extending the benefit of Notification No. 6/2005-S.T. We do not find any reason to interfere in such a detailed order. 10. Since the respondents are not in appeal against the said impugned order against the imposition of penalty under Section 77 of the Finance Act, 1994 the order to that extent needs to be a upheld. 11. The appeal filed by the Revenue to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their individual capacity, as per SCN also, all four co-owners have obtained separate Registration Certificate on 10.04.2012 and all the four co-owners individually paid their service tax liability along with interest on 14.02.2012. Thus, the ownership of the Property and providing of taxable renting of immovable Property by the four appellants in this case is in their individual capacity and, therefore, their tax liability should have been determined by considering their individual rental receipts and not collective one. From the various lease agreements made with above mentioned Commercial firms, it cannot be disputed that monthly rent was paid by the above named concerns to each appellant after deducting tax at their end. 6.3 From the show cause notice dated 19.10.2012, it is evident that the appellants had received rent as detailed below:- Sr. No. Period Amount (Rs.) 1. 2007-08 (1-6-2007 to 31-3-2008) ₹ 29,21,048/- 2. 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The SCN or the OIO do not talk of any audit objection or Preventive action or any inspection etc. on the basis of which not payment of service tax by the appellants was pointed out. Instead in the SCN, one statement of Shri Chandulal Vishrambhai Patel is only referred to which was recorded on 22-2-2012 which is 8 days after the appellants had paid service tax along with interest on their own. Thus, the claim of the appellant that they had paid service tax for the years 2009-10 and 2010-11 on their own initiative and there was no suppression of facts etc. on their part with any intention of evade service tax cannot be denied. Considering all these facts, I agree with the appellant s contention that this case was squarely covered under sub-section (3) of Section 73 which provided not to issue any notice under sub-section (1) of Section 73 if the service tax not levied or paid was paid along with interest by the person concerned before service of notice on him and informed the Central Excise Officer of such payment in writing. Further in Explanation 2 of the said sub section it is also clearly provided that no penalty under any of the provisions of the Act or the rules made thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X
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