2018 (2) TMI 1413 - AT - Service Tax

Real estate agent service - consideration received by them to change the name of the allottee/owner of a unit in the building and managed by them - Held that - an identical issue has come up before the Tribunal in the case of M/s MGF Developments Ltd. Vs CCE, Delhi 2018 (2) TMI 1048 - CESTAT NEW DELHI , where it was held that the promoter and manager of such property cannot be taxed as real estate agent for the consideration received to substitute the name of the owner / allottee in their records - appeal dismissed - decided against Revenue.

Summary

Issues:
Liability of the assessee-Respondents to be taxed under real estate agent service.

Detailed Analysis:
The present appeal before the Appellate Tribunal CESTAT New Delhi involves a dispute regarding the liability of the assessee-Respondents to be taxed under real estate agent service. The assessee-Respondents are primarily engaged in real estate promotion, constructing Malls and Residential Complexes, and selling/leasing them to customers. The specific issue in this appeal pertains to the consideration received by the assessee-Respondents for changing the name of the allottee/owner of a unit in a building managed by them. When the original owner/allottee of a property in the construction transfers it to another person, the name of the original owner/allottee needs to be substituted with the new owner, for which the assessee-Respondents charge "transfer charges." The Revenue contended that this consideration received by the assessee-Respondents qualifies as acting as a real estate agent.

Upon examining the matter and considering the arguments from both sides, the Tribunal referred to a previous case involving M/s MGF Developments Ltd. Vs CCE, Delhi, where a similar issue was addressed. In that case, it was established that the promoter and manager of such properties cannot be taxed as real estate agents for the consideration received to substitute the name of the owner/allottee in their records. Citing this precedent, the Tribunal concluded that the impugned orders in the present appeal are not sustainable and set them aside, ultimately allowing the appeals filed by the assessee-Respondents.

In alignment with the ruling in the case of M/s MGF Developments Ltd., the Tribunal found no grounds to interfere with the impugned order and thus upheld the same along with the reasons provided therein. Consequently, the appeal filed by the Revenue was dismissed by the Tribunal, affirming the decision in favor of the assessee-Respondents.

This detailed analysis of the judgment highlights the core issue of the dispute, the arguments presented by both parties, the legal precedent cited, and the final decision rendered by the Appellate Tribunal CESTAT New Delhi regarding the liability of the assessee-Respondents to be taxed under real estate agent service.