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TMI Blog2019 (5) TMI 1485X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, whatsoever consideration received by an individual, it is the subject matter of taxation in respect of that individual person either as per income tax or as per service tax. Rental income of other co-joint owner cannot be considered. Receipt of rental income by every individual is only subject to liability of service tax - If the value is below thresh-hold exemption limit in case of any individual, the same will not be taxable being exempted under Notification No. 06/05-ST dated 01.03.2005. At the same time in case of any individual person if the thresh-hold limit exceed in financial year, the same will be liable for service tax. The issue decided in the case of SAROJBEN KHUSALCHAND OTHERS VERSUS C.S.T. -SERVICE TAX - AHMEDABAD [ 2017 (5) TMI 240 - CESTAT AHMEDABAD ] where it was held that the ownership of the Property and providing of taxable renting of immovable Property by the four appellants in this case is in their individual capacity and, therefore, their tax liability should have been determined by considering their individual rental receipts and not collective one. Service tax liability do not arise - appeal allowed - decided in favor of appellant. - MR. RAMESH NAIR, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of the impugned order. 4. Heard both the sides and perused the records. We find that though in respect of one property, there are joint owner but each joint owner is independent in respect of ownership of respective shares, therefore, whatsoever consideration received by an individual, it is the subject matter of taxation in respect of that individual person either as per income tax or as per service tax. Rental income of other co-joint owner cannot be considered. Therefore, in our considered view receipt of rental income by every individual is only subject to liability of service tax. If the value is below thresh-hold exemption limit in case of any individual, the same will not be taxable being exempted under Notification No. 06/05-ST dated 01.03.2005. At the same time in case of any individual person if the thresh-hold limit exceed in financial year, the same will be liable for service tax. This issue has been considered by this Tribunal in the case of Sarojben Khushalchand (Supra) wherein the Tribunal dealing with the absolute identical issue passed the following order: 9. We find force in the contention of the ld. Advocates representing the respective appellants in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Deoram Vishrambhai Patel (Supra), Tribunal has passed following order: 6. We have considered the submissions made by both sides and perused the records. The issue that needs to be decided in this case is whether the respondent and his brothers are to be treated as association of persons or other vise and service tax liability on it arises, should be confined without the benefit of the Notification No. 6/2005-S.T. 7. It is undisputed that the property which has been rented out by the respondent and his brothers is jointly owned property; Service Tax liability arises on such renting of property. 8. On deeper perusal of impugned order, we find that the first appellate authority has considered all the angles in the dispute and came to the correct conclusion. The findings of first appellate authority is as under. 6.2 On mere reading of the Order-in-Original, it is evident that the adjudicating officer has considered above named four persons as one person for determining tax liability and imposition of penalties without telling any legal basis for doing so. The appellants have contested the Order in Original mainly on the grounds that rented property belongs to four separate persons ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt off rent by each appellant exceeded the statutory exemption limit of ₹ 10 lakhs and the appellants have paid service tax along with interest on their own before receipt of SCN. This fact is not disputed by the department also and no additional tax liability has been worked out for the said period in OIO. 6.4 Since the appellants were individually liable to pay service tax and eligible for the exemption under general exemption Notification 6/2005-S.T., dated 1-3-2005 during the period 2007-08 and 2008-09, no service tax was payable during the said period. Hence, the question of penalty under Section 76 for the said period does not arise. For the subsequent period i.e. 2009-10 2010-11, the appellants have already accepted their tax liability and paid Service tax along with interest on 14-2-2012. The said payment of service tax is certainly a delayed payment, but was made by the appellants on their own when they realized that their taxable value for renting of property had exceeded the exemption limit of ₹ 10 lakhs. The adjudicating authority has claimed in his order that the appellants paid service tax only after Department started investigation, but it is not support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... needs to be a upheld. 11. The appeal filed by the Revenue to the extent its challenges the impugned order is devoid of merit and liability to be rejected and we do so. 12. The appeal is rejected. In case of Anil Saini Vs. CCE-Chandigarh-I (Supra) vide final order No. A/61723-61729/2016 the Tribunal observed as under: 3. After hearing both the sides, considering the fact that the issue has already been dealt by this Tribunal in the case of CCE, Nasik v. Deoram Vishrambhai Patelreported in 2015 (40) S.T.R. 1146 (Tri.-Mumbai), wherein this Tribunal observed as under : 6. We have considered the submissions made by both sides and perused the records. The issue that needs to be decided in this case is whether the respondent and his brothers are to be treated as association of persons or other vise and service tax liability on it arises, should be confined without the benefit of the notification No. 6/2005-S.T. 7. It is undisputed that the property which has been rented out by the respondent and his brothers is jointly owned property; service tax liability arises on such renting of property. 8. On deeper perusal of impugned order, we find that the first appellate authority has considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008-09 respectively which is below the exemption limit of eight lakhs and ten lakhs during the relevant period. The appellants were, therefore, not liable to pay service tax on the amounts received by them during these two years by virtue of Notification No. 6/2005-S.T., dated 1-3-2005. The appellant s case is also supported by the Tribunal s decision in the case of Dinesh K. Patwa v. CST, Ahmedabed which is referred in para 3(ii) above. However, in the Financial Year 2009-10 and 2010-22, the receipt of rent by each appellant exceeded the statutory exemption limit of ₹ 10 lakhs and the appellants have paid service tax along with interest on their own before receipt of SCN. This fact is not disputed by the department also and no additional tax liability has been worked out for the said period in OIO. Since the appellants were individually liable to pay service tax and eligible for the exemption under general exemption Notification 6/2005-S.T., dated 1-3-2005 during the period 2007-08 and 2008-09, no service tax was payable during the said period. Hence, the question of penalty under Section 76 for the said period does not arise. For the subsequent period i.e. 2009-10 6.4 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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