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2023 (5) TMI 97 - AT - Service TaxLevy of service tax - Real Estate Agent service - land sold to M/s. Sahara India Commercial Corporation Limited - appellant involved in the sale and purchase of land - appellant purchase land at x price and the same is sold to M/s. Sahara India Commercial Corporation Limited at x 1 price - profit or lose is on the account of appellant only - HELD THAT - Under the same arrangement of activity of purchase of land from farmers / landowners and re-sale the same to Real Estate Developers, in the present case M/s. Sahara India Commercial Corporation Limited, this Tribunal has taken a view that under this arrangement the purchaser and re-seller of land cannot be treated as Real Estate Agent for charging service tax under the said category. Reliance can be placed in the case of PREMIUM REAL ESTATE DEVELOPERS, RAJAT YADAV VERSUS C.S.T. -SERVICE TAX DELHI 2018 (11) TMI 1472 - CESTAT NEW DELHI where it was held that since the specific remuneration has not been fixed in the deal for acquisition of the land, both the parties have worked more as a partner in the deal rather than as an agent and the principle, therefore the taxable value itself has not acquired finality in this case - In the identical nature of transaction, it was held that assessee cannot be charged with service tax under Real Estate Agent . Following the said decision of this Tribunal, in the facts of present case the appellant s activity does not fall under the category of Real Estate Agent Service, hence service tax demand under the said head cannot be sustained. Appeal allowed - decided in favour of appellant.
Issues Involved:
The issue involved in the present case is whether the appellant, engaged in the sale and purchase of land, and subsequently selling the land to a commercial corporation, is liable to pay service tax under the category of Real Estate Agent service as defined under Section 65(88) read with Section 65(89), 65(105)(v). Comprehensive Details: In this case, the appellant engaged in the business activity of purchasing land from farmers and reselling it to M/s. Sahara India Commercial Corporation Limited. The appellant argued that their activity does not amount to Real Estate Agent service as they purchase land at one price and sell it at a different price, with the profit or loss solely on their account. Citing relevant judgments, the appellant contended that they are not acting as a Real Estate Agent. The Revenue, represented by the Superintendent (AR), reiterated the findings of the impugned order. Upon careful consideration of the submissions and perusal of the record, the Tribunal found that under the arrangement of purchasing land from farmers and reselling it to Real Estate Developers like M/s. Sahara India Commercial Corporation Limited, the appellant cannot be treated as a Real Estate Agent for service tax purposes. The Tribunal highlighted that the lack of a defined consideration for the alleged service rendered the transaction not liable to service tax. The Tribunal emphasized that the appellant and M/s. Sahara India Commercial Corporation Limited were more like partners in the deal rather than acting as agents. Additionally, the Tribunal noted that since the exact remuneration for any service was not quantified and many Memorandums of Understanding were not fully executed, the taxable value had not reached finality. Therefore, demanding service tax on the entire amount paid to the appellant for land acquisition was deemed unsustainable in law. The Tribunal also observed that there was no mala fide on the part of the appellant, the transaction was duly recorded in their books of account, and there was no suppression of information from the revenue. Consequently, the Tribunal held that the extended period of limitation was not applicable and allowed the appeals, setting aside the impugned order. The appellant was granted consequential benefits in accordance with the law. In conclusion, the Tribunal found that the appellant's activity did not fall under the category of Real Estate Agent Service based on a previous decision, and therefore, the service tax demand under that head could not be sustained. The impugned order was set aside, and the appeal was allowed with any consequential relief as per the law.
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