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2014 (7) TMI 933

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..... ord advice is not provided by M/s. SRL to M/s. SEL. In fact, it is M/s. SEL, who provide technical inputs regarding suitability of land for wind farm projects, identify the suitable land and thereafter, as per the terms of the Agreement, ask M/s. SRL to acquire/lease such land. The land has to be free of any encumbrance before transfer of such land to the customers of M/s. SEL or to M/s. SEL themselves. All the regulatory approvals benefit the purchaser of land and expenses incurred thereon are recovered from the purchaser. Thus no real estate agent service can be said to have been provided by M/s. SRL to M/s. SEL. - Even the facilitation of loans by M/s. SEL to M/s. SRL for purchase of land and mortgage thereof is a financial arrangement between two which does not make M/s. SRL, real estate agent. Such financial arrangements and the exigibility to service tax thereof is not the issue here. The books of accounts of the appellants indicate that they hold large inventory of land. No consideration has been shown to be paid to M/s. SEL by M/s. SRL because no service is rendered by M/s. SRL to M/s. SEL. - M/s. SRL have not provided service of Real Estate Agent to M/s. SEL - Decided in f .....

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..... in their ownership. Such land which is in their ownership, although identified as suitable by M/s. SEL for setting up wind farm projects, is then sold to customers who are brought forward by M/s. SEL. Similar is the situation with respect of land leased by them from independent persons and then sub-leased to customers of M/s. SEL. Before selling/leasing land they may also develop the same as per requirement of a wind farm project, and as guided by M/s. SEL, before the land is sold/leased to the customers of M/s. SEL for setting up the wind farm projects. As per their Agreement with M/s. SEL, the appellants would be entitled a commission of 11% of the total cost of acquisition of land and expenses etc. However, according to them, the profit actually earned by the appellants has varied from 3% to 34%. According to the appellants, the Revenue demanded duty on the income from land operations and deducted cost of land operations to arrive at the commission earned by the appellants. They state that this procedure of arriving at the value is, in any case, incorrect because it includes financial cost while arriving at the value of taxable service. 4. Revenue's main contention is tha .....

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..... conjunction with its subsidiaries and associate companies. B. SRL, a public limited Company incorporated in India and owned by the promoters of the Company, is primarily engaged in the business of acquiring land suitable for wind farm projects as designated by the Company, and providing such land on an exclusive basis to the Company or to the customer of the Company (the Customers ) to be used for setting up wind farm projects. SRL is also engaged in the business of generating power through the ownership of WTGs. C. SRL acquires/leases such land from various entities such as private owners, or Government in case of revenue land or forestland. D. The land acquired/leased by SRL is sold or leased or sub-leased to the Company or to the Customers, on an exclusive basis, to be utilized for setting up wind farm projects. ACQUISITION OF LAND 3.1 SRL shall acquire and/or obtain on lease such land as identified by the Company suitable for the purposes of setting up a windfarm project ( Windfarm Land ). 3.2 SRL undertakes to ensure that it shall comply with and satisfy all conditions prescribed by the Company while undertaking the acquisit .....

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..... fied by the Company, to Customers and/or to the Company at such consideration as determined in accordance with Clause 6 below. 4.3 SRL undertakes that it shall at all times ensure that the terms and conditions, if any, as specified by the Company shall be strictly adhered to and shall not be varied or amended in the agreements for sale, lease or sub-lease of the Windfarm Land to the Customer except with the prior written consent of the Company. 5. TRANSFER OF LAND 5.1 The Transfer of the Windfarm Land to the Customer shall be completed by SRL upon the Customer having executed a purchase order for the purchase of WTGs from the Company or such time subsequently as extended by the Company. 5.2 SRL hereby undertakes and covenants that it shall not Transfer any land or Windfarm Land acquired by it, other than as required by the Company or without the written consent of the Company. 6. CONSIDERATION In consideration for SRL acquiring Windfarm Land and exclusively offering such land for Transfer at the option of the Company in accordance with Clause 4 and 5 hereof, the consideration payable for the Transfer of Windfarm Land after the date of this .....

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..... and other expenses. Thus, it cannot be said that they have provided any service to M/s. SEL in relation to purchase and further sale/lease of land to customers of M/s. SEL. As the definition of Real Estate Agent includes a real estate consultant, it needs to be examined whether the activity of M/s. SRL would come in the ambit of real estate consultant. Here again for coverage under this definition, the appellants should have given advice, consultancy or technical assistance in relation to evaluation, conception, design, development, construction, implementation, supervision, maintenance, marking, acquisition or management of real estate . From the fact on record advice is not provided by M/s. SRL to M/s. SEL. In fact, it is M/s. SEL, who provide technical inputs regarding suitability of land for wind farm projects, identify the suitable land and thereafter, as per the terms of the Agreement, ask M/s. SRL to acquire/lease such land. The land has to be free of any encumbrance before transfer of such land to the customers of M/s. SEL or to M/s. SEL themselves. All the regulatory approvals benefit the purchaser of land and expenses incurred thereon are recovered from the purchaser. Th .....

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