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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 ..... e 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 grossly injudicious, unwarranted, against the facts of the case and untenable at law. Tax Effect relating to above mentioned ground of appeal is Rs.2,15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance 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 right from 05.03.2011 and paying the rent and the same was being allowed as deduction. Further submitted that, the said 'expense for the purpose of business of assessee' is covered by section 30 of the Act. The service tax on renting of property was levied by the legislature with effect from 01.06.2007, thus, the transaction of renting of property for non-residential purpose has been brought int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice 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 provides for Appellant liability to make payment of these service tax dues. 5.5 I have perused the impugned order and gone through the submission including lease deeds filed by the appellant. It is noted that the clause 8 of agreement which provides that only there dues to be levied by the Government, would be responsibility of the license which arises out of any voluntary or involuntary breach of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 tax of rent, the same takes the character of the rent itself, as a result, the same should be allowed under section 30 of the Act. 10. Further, the ld. Counsel for the assessee submitted that the payment made to Mr. Gajinder Singh amounting to Rs.19,31,875/- and Mr. Nirmohan Singh Pahwa amounting to Rs.7,21,875/- was in respect of service tax paid on rent, which has been subsequently deposited by Mr. Gajin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 consideration and the assessee has not proved that the premises has been used for business purpose. Though the lease agreement need not be in writing and the tenancy can be oral, but to prove the tenancy the assessee could have produced the owner before the Assessing Officer in support of his claim and the burden cast upon the assessee to substantiate the claim that the premises has been used for 'Business Purposes'. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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