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TMI Blog2023 (4) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... horities. Liability of service tax on the rent is always passed on the recipient of the service. The reasoning given by the Revenue authorities in the present case are grossly erroneous. The allow-ability of rent paid for the purpose of business of assessee is covered under section 30 of the act. As regards service tax of rent, the same takes the character of the rent itself, as a result, the same should be allowed under section 30. Considering documents produced by the assessee before us, we deem it fit to remand the issue to the file of the AO and examine the submission and the documents produced thereon and pass appropriate order in accordance with law after providing adequate opportunity of being heard to the assessee. Ground No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2014-15. 2. The assessee has raised the following grounds of appeal :- 1. Under the facts and circumstances of the case, the ld. First Appellate Authority has grossly erred in affirming the action of Id. Assessing Officer disallowing expenditure on account of accumulated service tax on rent amounting to Rs.26,53,750/- paid by the assessee which is grossly injudicious, unwarranted, against the facts of the case and untenable at law. Tax Effect relating to above mentioned ground of appeal is Rs. 8,61,009/- 2. Under the facts and circumstances of the case, the ld. First Appellate Authority has grossly erred in affirming the action of ld. Assessing Officer disallowing rent paid amounting to Rs.6,64,000 which is gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and further confirmed the disallowance of rent paid amounting to Rs.6,64,000/- on the ground that the assessee has not prove the existence of tenancy and also usage of the premises for business purpose. Aggrieved by the order of the ld. CIT (Appeals), the assessee preferred the present appeal on the grounds mentioned above. 5. The Ground No. 1 of the assessee is regarding disallowance of expenditure on account of accumulated service tax of rent amounting to Rs.26,53,750/-. 6. The ld. Counsel for the assessee submitted that the assessee is a lessee of the premises in Okhla Industrial Area, wherein the assessee is carrying the business of manufacturing of readymade garments, the assessee had been tenant of the said premises ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has disallowed the amount of service tax paid on the rent on the ground that the reply of the assessee found to be not satisfactory . In appeal before the CIT (Appeals) the said addition has been sustained in the following manner:- 5.4 During the course of appellate proceedings, the AR of the appellant was confronted to this fact that no enabling clause w.r.t liability of service tax to be borne by the tenant (appellant) is found to be available in the lease deeds and therefore, he was to explain and submit due evidence for this claim in the form of amended/ supplementary element if any. However, the AR did not provide any supportings/ evidence or any clarification but claimed that clause no. 8 of rent agreement prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein the supplier of the services collects the tax from the recipient of the services and deposits the same with Revenue authorities. Even the levy on the renting of immovable property wherein the service tax has to be borne by the lessee but the same has to be collected by the landlord who is under obligation to perform the function of facilities or wherein he collect the tax and deposits the same with the Revenue authorities. Thus, the liability of service tax on the rent is always passed on the recipient of the service. The reasoning given by the Revenue authorities in the present case are grossly erroneous. The allow-ability of rent paid for the purpose of business of assessee is covered under section 30 of the act. As regards service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises B-285, Okhla Industrial Area, Phase-I, New Delhi, there was no lease agreement and the assessee has not submitted any document to prove that the said premises has been used for business purpose. 12. The ld. Counsel for the assessee submitted that the assessee has been operating the business in the building, B-285, Okhla Industrial Area for many years. The assessee entered into lease agreement with Ms. Manju Gosai on 01.02.2009, thereafter the same has been renewed orally. The assessee has produced the initial lease deed dated 01.02.2009 and is placed at page Nos. 50 to 53 of the paper book. It is the specific allegation of the Revenue authorities that there is no written agreement of lease is in existence in the year under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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