2018 (2) TMI 1048 - AT - Service Tax

Liability of tax - real estate agent service - Revenue entertained a view that this consideration is received by the appellant acting as a real estate agent - Held that - The Tribunal while examining similar set of facts 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 - reliance placed in the case of RIICO Ltd., M/s. Rajasthan State Industrial Development & Investment Corpn. Ltd. Vs. CCE, Jaipur-II 2017 (5) TMI 673 - CESTAT NEW DELHI - appeal allowed - decided in favor of appellant.

Summary

Issues: Liability of the appellant to be taxed under real estate agent service for the period 01.04.2005 to 31.03.2010.

The judgment revolves around the liability of the appellant to be taxed under the category of real estate agent service for a specific period. The appellants are primarily involved in real estate promotion activities, including constructing malls and residential complexes for sale or lease to customers. The dispute in the present appeal pertains to the consideration received by the appellant for changing the name of the allottee/owner of a unit in a building managed by them. This change in ownership necessitates a substitution of the original owner/allottee with a new owner, for which the appellant charges "transfer charges." The Revenue contended that this consideration constitutes income received by the appellant while acting as a real estate agent.

Upon hearing both parties, the Tribunal referred to previous decisions in similar cases, such as RIICO Ltd., M/s. Rajasthan State Industrial Development & Investment Corpn. Ltd. Vs. CCE, Jaipur-II; CST, New Delhi Vs. M/s. Ansal Properties & Infrastructures Ltd.; M/s. Ansal Housing & Construction Ltd. Vs. CST, New Delhi; and CST, Delhi Vs. M/s. Omaxe Limited. The Tribunal noted that in these cases, it was held that the promoter and manager of a property cannot be taxed as a real estate agent for receiving consideration to substitute the name of the owner/allottee in their records.

Based on the above legal precedent, the Tribunal concluded that the impugned orders were unsustainable. Therefore, the Tribunal set aside the orders and allowed the appeals in favor of the appellant. The judgment emphasizes that the appellant, engaged in real estate promotion and management, should not be taxed as a real estate agent for the consideration received to change the name of the owner/allottee in their records.

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