9911796707
TMI Blog2025 (1) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase and sale of land . In general as customary in such transactions generally such sale and purchase transactions are preceded with agreement to sale. The respondent pays advance to the seller of land and executes such agreement to sale and later on purchase of land by executing sale deed. At some occasions due to various reasons it may so happen that the appellant becomes conformity party by the property eventually sold to the third buyers and the appellant received their advanced back along with some mark up. In such transaction the entire sale price suffers stamp duty including the component of advance as well as mark up being received by the appellant. The issue involved in this background is that whether having sold the land which was intended to be purchased initially for a profit attracts the levy of service tax under the service category of Real Estate Agent . 2. Shri Rajesh Nathan learned Assistant Commissioner AR appearing on behalf of the revenue appellant reiterates the grounds of appeal. 3. Shri Saurabh Dixit learned counsel appearing on behalf of the assessee respondent at the outset submits that on the very same issue in the appellant's own company s case i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Sahara India. Such land was to be arranged by them by way of procurement from the land owners. The appellant was also obligated to examine the title of the prospective land owner and to further ensure the availability of land owner at the office of the Registrar for execution of the sale deed. In fact Sahara India instead of paying the price directly to the land owner, paid lump sum amount to the appellant. Thereafter the appellant identified the land, the seller, and after being satisfied with the title of the seller, entered into agreement with the seller and obtained power of attorney, in their favour. Thereafter the appellant transferred the land in favour of Sahara India. Thus we find that the transaction is one of trading in land. In such transactions the appellant could either incur a loss or have a surplus (profit). 28. From the perusal of Memorandum of Understanding (MoU) between the appellant and M/s. Sahara India Ltd. It is very obvious that MoU is not only for providing purely service for acquisition of the land but involves many other function such as verification of the title deeds of the persons from whom the lands are to be acquired and obtaining necessary rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry transaction will not arise. Contributions for the discharge of liabilities or for meeting common expenses of a group of persons aggregating for identified common objectives will not meet the criteria of taxation under Finance Act, 1994 in the absence of identifiable service that benefits an identified individual or individuals who make the contribution in return for the benefit so derived. 13.... Neither can monetary contribution of the individuals that is not attributable to an identifiable activity be deemed to be a consideration that is liable to be taxed merely because a club or association is the recipient of that contribution. 14. To the extent that any of these collections are directly attributable to an identified activity, such fees or charges will conform to the charging section for taxability and, to the extent that they are not so attributable, provision of a taxable service cannot be imagined or presumed. Recovery of service tax should hang on that very nail. Each category of fee or charge, therefore, needs to be examined severally to determine whether the payments are indeed recompense for a service before ascertaining whether that identified service is taxable. 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intained by the appellant. Further there is no suppression of information from the revenue. Accordingly, we hold that the extended period of limitation is not applicable. 33. Consequently, we allow the appeals and set aside the impugned order. The appellant shall be entitled to consequential benefits, in accordance with law. 5. In the above decision, in the identical nature of transaction, it was held that assessee cannot be charged with service tax under 'Real Estate Agent'. Following the said decision of this Tribunal, we are of the view that in the facts of present case the appellant's activity does not fall under the category 5 ST Appeal No. 13203 of 2013-DB of Real Estate Agent Service, hence service tax demand under the said head cannot be sustained. Accordingly, the impugned order is set-aside and the appeal is allowed with consequential relief if any, in accordance with the law Premium Real Estate Developers 2018(11) TMI 1472- CESTAT NEW DELHI is reproduced below: 27. Having considered the rival contentions and on perusal of record, we find that there is no consideration defined and/or provided for the alleged service. In absence of any defined consideration for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case. In this regard, we also take shelter of this Tribunal's decision in the case of Mormugao Port Trust vs. CC, CE ST, Goa 2017 (48) S.T.R. 69 (Tri. Mumbai). The relevant extract is reproduced here below: 18. In our view, in order to render a transaction liable for service tax, the nexus between the consideration agreed and the service activity to be undertaken should be direct and clear. Unless it can be established that a specific amount has been agreed upon as a quid pro quo for undertaking any particular activity by a partner, it cannot be assumed that there was a consideration agreed upon for any specific activity so as to constitute a service. In Cricket Club of India v. Commissioner of Service Tax, reported in 2015 (40) S.T.R. 973 it was held that mere money flow from one person to another cannot be considered as a consideration for a service. The relevant observations of the Tribunal in this regard are extracted below: 11. ... Consideration is, undoubtedly, an essential ingredient of all economic transactions and it is certainly consideration that forms the basis for computation of service tax. However, existence of consideration cannot be presumed in every money f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty and registration. Thus, a total amount of Rs. 8,41,50,000/- have been remitted to the appellant out of which a total amount of Rs. 3,66,32,000/- have been spent by the appellant for procurement and registration of land. Thus, an amount of Rs. 4,75,18,000/- still remain unspent with the appellant. It is to be seen that out of the above amount though the MoU was for 100 acres of land till the issue of the show cause notice only 77.96 acres of land could only be acquired and thus the remaining amount still was to be used for procurement/acquisition of balance land. This indicates that firstly; the MoU has not been executed fully and therefore the actual remuneration to the appellant have not got finalized and therefore we feel that issuing the show cause notice in such a stage was premature and unwarranted. 31. As discussed above, since the exact amount of remuneration for providing any service, if any, has not been quantified at the same time since most of the MoU remained to be fully executed and therefore the exact amount of remuneration, which was the difference in amount paid to the seller of land and average price decided in MoU, could not be finalized and therefore we feel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
