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TMI Blog2017 (4) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... heir rooms and meal. Many hotels will have various other incidental facilities relating to entertainment, personal care, etc. The presence of these facilities does not exclude the building from the category of “hotel” - similar issue came up for decision before the Tribunal in Jai Mahal Hotel Pvt. Ltd [2014 (7) TMI 540 - CESTAT NEW DELHI], where it was held that buildings used for or as hotels do not amount to immovable property. The legislative provision in question i.e. the exclusionary clause (d), to the extent relevant and material, excludes from the purview of immovable property, buildings used for the purposes of accommodation including for hotels - demand set aside - appeal allowed - decided in favor of appellant. - Service Tax Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition for tax entry, immovable property does not include buildings used for the purposes of accommodation including hotels, hostels, etc. As such, there is no service tax liability on the appellant. Further, it is submitted that the agreement provides for sharing a profit arising out of hotel business and as such, such sharing a profit cannot be considered as a rent for the purpose of service tax levy. Ld. Counsel also submitted that the lower authorities fell in error in concluding that since the hotel has got other facilities apart from accommodation the same cannot be considered as falling under excluded category. It is submitted that the main purpose of the hotel is for accommodation of the guests. However, in any good quality hotel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statutory provisions relating to the renting out of immovable property service in terms of Section 65(105)(zzzz) are as below:- Section 65(105)(zzzz) to any person by any other persons by renting of immovable property or any other service in relation to such renting for use in the course of or for furtherance of business or commerce. Explanation 1 For the purposes of this sub-clause, immovable property includes- (i) building or part of a building, and the land appurtenant thereto; (ii) land incidental to the use of such building or part of a building; (iii) the common or shared areas and facilities relating thereto; and (iv) in case of a building located in a complex or an industrial estate, all common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to entertainment, personal care, etc. The presence of these facilities does not exclude the building from the category of hotel . 7. We note that similar issue came up for decision before the Tribunal in Jai Mahal Hotel Pvt. Ltd.- 2014 (36) STR 669 (Tribunal Delhi). The Tribunal observed as below:- 5. That the appellant had leased its buildings to M/s. Indian Hotels Company Limited is not in dispute nor is it in dispute that the purpose of the transfer of the property in favour of the other party is for establishment of a hotel. The issue is whether in such circumstances the transaction falls outside the purview of the taxable service. Clause (zzzz) of Section 65(105) enumerates the taxable service as any service provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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