2017 (11) TMI 546 - AT - Service Tax

Real estate agent service - consideration received under the heading Administrative Charges for allowing transfer of flat buyers right to another person - Held that - identical issue decided in the case of CST, New Delhi Versus M/s Ansal Properties And Infrastructures Ltd. 2017 (9) TMI 1071 - CESTAT NEW DELHI , where it was held that the respondent is a real estate developer selling their constructed flats. They are dealing with the buyers, old or new, on principal to principal basis. Accordingly, we are in agreement with the impugned order that no service tax liability can be confirmed against the respondent under this category - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Tax liability of the appellant for "Administrative Charges" under "real estate agent service."

Analysis:
The appellant, engaged in real estate development activities, challenged the tax liability imposed by the Revenue for "Administrative Charges" related to transferring flat buyers' rights. The Revenue considered the amount taxable under "real estate agent service." The appellant contended they were not real estate agents but developers, transacting on a principal-to-principal basis. They cited a Tribunal decision with similar facts to support their argument.

The Revenue argued that a real estate developer can also act as a real estate agent based on the nature of the activity. They claimed that transferring property rights falls under the category of real estate agents. The Tribunal examined the "administration charges" collected by the appellant for transferring flat ownership. The Tribunal noted that similar facts were considered in a previous case. The statutory provisions defining "real estate agent" and "real estate consultant" were discussed, along with the definition of taxable service in relation to a real estate agent.

The Tribunal found that the appellant did not act as a real estate agent in the transaction of transferring flat ownership. The changes in records by the appellant were not causative factors for the sale or purchase of the property. The Tribunal referred to previous judgments to support its decision, emphasizing that the appellant was a real estate developer selling constructed flats on a principal-to-principal basis. The Tribunal concluded that no service tax liability could be confirmed against the appellant under the real estate agent category.

Based on the above analysis, the Tribunal set aside the impugned order, finding no merit in the tax liability imposed on the appellant for "Administrative Charges." The appeal was allowed, and the order was pronounced in open court.