2018 (2) TMI 1042 - AT - Service Tax

Management or Business Consultant service - Revenue entertained a view that the appellants were providing taxable service under the category of Management or Business Consultant in terms of Section 65(65) read with Section 65(105)(r) of the Finance Act, 1994 - Held that - respondent assessee has not provided any advice or consultancy with reference to organisation of M/s RPS Associates or business of M/s RPS Associates. No such role can be inferred from the agreement - demand set aside. Real Estate Agent service - consideration received to effect the change of name of allottees/ buyer of the property in the project developed by the appellant - Held that - identical issue decided in the case of CST Vs. Ansal Properties & Infrastructure Ltd. 2017 (9) TMI 1071 - CESTAT NEW DELHI , where it was held that the changes made in the records of the respondent are not causative factors for such sale or purchase, no service tax liability can be confirmed against the respondent under this category. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Tax liability of the respondent as a management consultant.
2. Tax liability under the category of Real Estate Agent service.

Analysis:

Issue 1: Tax liability as a management consultant
The case involved the respondent, engaged in real estate development, entering into an agreement with another party. The Revenue contended that the respondent provided taxable services as a "Management or Business Consultant." The Revenue argued that the respondent's expertise in real estate business, marketing, and selling residential units indicated a consultancy role, making them liable for tax under this category. However, the respondent's counsel argued that they were business partners in the project, not consultants, and the agreement did not mention any consultancy role. The Tribunal examined the agreement and found no consultancy or advisory element. The arrangement was deemed a joint business venture where income sharing was based on gross receipts, leading to the dismissal of the tax liability under this category.

Issue 2: Tax liability as a Real Estate Agent
Regarding the tax liability under the Real Estate Agent service category, the Revenue claimed that the respondent received consideration for transferring property names, making them liable for service tax. The Tribunal referred to a similar case and concluded that the respondent, a real estate developer, acted on a principal-to-principal basis, not as an agent, when dealing with property transfers. The Tribunal distinguished this case from a previous ruling involving a registered real estate agent. As a result, the Tribunal dismissed the Revenue's appeal, finding no merit in confirming service tax liability against the respondent under the Real Estate Agent category.

In conclusion, the Tribunal dismissed the Revenue's appeal, stating that the respondent had no tax liability as a management consultant or a Real Estate Agent based on the detailed analysis of the agreement and business arrangement.