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TMI Blog2022 (2) TMI 1448X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice is incorrect. Receipts from commercial complexes - HELD THAT:- The activity of awarding and ensuring the execution of the work is not undertaken on behalf of allottees who enter the transaction at a much later stage. Being sale of immovable property, the receipts are beyond the purview of section 65(105)(zzq) of Finance Act, 1994, intended for bringing commercial or industrial construction service to tax. Development charge and management charge under management, maintenance or repair service - HELD THAT:- A transaction cannot be subjected tax liability under Finance Act, 1994 when it is clearly a transaction of sale with no perceivable service element - The elaborate submissions of the assessee in response to the notice may assist in making that determination and, that it has not been done, jeopardises the conclusion of taxability. It would, therefore, be appropriate for that to be determined afresh by the original authority. To enable that exercise, it is appropriate to set aside the impugned order in its entirety but, while doing so, to remand the determination of liability of ₹ 4,35,91,083/- back to the original authority to render a finding by application of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature and, therefore, beyond the scope of a tax that devolves on commercial activity. Explaining the role of the appellant, he submits that they execute projects approved by the Government of Karnataka which include residential and commercial space and that units in residential complexes are allotted after completion to persons intending to participate in the purchase by applying with initial deposit and undertaking to pay the remaining amount in instalments. Likewise, commercial complexes may be similarly sold or leased for business activities. According to him, various categories of receipts from applicants who participate in the allotment process and from allottees towards reimbursement of costs incurred for financing and for statutory pre-requisites are being sought to be charged to tax without examining the taxability under law. Pointing out that the investigations, commenced in 2009, took an unduly long time to culminate in the show cause notice, and that too from their statutory filings, he argued that confirmation of demand, if at all valid, beyond the normal period of limitation is without authority. 3. It is further contended by him that the issue in dispute stands set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interest in acquiring the units only after completion. Consequently, fastening of tax liability in terms of section 65(105)(zzzh) of Finance Act, 1994 in the absence of service is incorrect. 7. In the impugned order, demand of ₹ 1,38,71,101/- has been confirmed on receipts from commercial complexes which is no different from transactions with allottees of residential units. The activity of awarding and ensuring the execution of the work is not undertaken on behalf of allottees who enter the transaction at a much later stage. Being sale of immovable property, the receipts are beyond the purview of section 65(105)(zzq) of Finance Act, 1994, intended for bringing commercial or industrial construction service to tax. 8. For concluding that development charge and management charge was taxable as consideration for rendering of management, maintenance or repair service , the adjudicating authority reasoned that 37. There is a proposal to levy service tax on Management, Maintenance or Repair Service for which the assessee has argued that the charge is proposed to be levied on development charges which would fall under taxable service construction of residential complex and non taxa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute, the adjudicating authority concluded that the five of the heads of account did itemise consideration that were chargeable to tax for each of the five years with the finding that these 39. are more rightly classifiable under Management, Maintenance or Repair Services . Accordingly, I hold that the demand of Rs.2,27,08,255/- for the year 2006-07, demand of Rs.4,74,71,394/- for the year 2007-08, demand of Rs.7,97,14,434/- for the year 2008-09, demand of Rs.15,51,51,355/- for the year 2009-10 and demand of Rs.10,34,51,249/- for the year 2010-11 made under business support services is not tenable and sustainable in law. which the show cause notice had not proposed. 9. Furthermore, we note that, in their response of 31st May 2012 to the show-cause notice issued to them, the appellant herein had furnished details of the charges collected by them as well as the intended purpose of these as reimbursements in the course of managing properties in possession of other entities but which appear to have been ignored by the adjudicating authority. In addition to this disregard of submissions, the conclusion of taxability in the impugned order does not appear to have been the consequence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the employers, no service tax liability can arise in the transaction. 10. As we have held that a transaction cannot be subjected tax liability under Finance Act, 1994 when it is clearly a transaction of sale with no perceivable service element, one unvarying flaw in the present determination before us, and as amply elaborated by the Tribunal in re Employee Provident Fund Organisation, is the absence of any ascertainment of the provider and recipient of the impugned service which renders the incomplete the exigibility to tax under section 66 of Finance Acct, 1994 but, while not impacting those receipts, the same cannot be said for the portion of the schedule of other income which are not receipts of sale. However, merely owing to exclusion from being a sale transaction, the hammer of tax on services cannot be brought to bear upon it. All that can be concluded from the impugned order, in relation to the seven heads therein, is that the receipts have been presumed to be consideration for service which, while those may be, can be an acceptable assumption only upon establishing the payer to have made payment, either as or on behalf of, recipient and the payee to be the provider of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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