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TMI Blog2025 (1) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... a combined fashion. If considered individually, the appellants are eligible for the benefit of exemption contained under Notification. No. 06/2005-S.T dated 01.03.2005.' Conclusion - i) The appellants are eligible for the service tax exemption individually; they are not an association of persons. ii) Co-owners receiving rent individually are entitled to separate threshold exemptions. Appeal allowed. - MR. S. S. GARG, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Rajiv, Agnihotri, Advocate for the Appellant Shri Harish Kapoor, Authorized Representative for the Respondent ORDER Shri Ashish Jain (Appeal No. ST/55327/2014) and Shri Sanjeev Jain (Appeal No. ST/55328/2014) has leased out their premises to M/s Crystic Resins India Pvt. Ltd. and have been receiving rent individually for their part of the joint property. On the basis of Audit conducted of the accounts of M/s Crystic Resins India Pvt. Ltd., Revenue was of the opinion that Shri Ashish Jain and Shri Sanjeev Jain are Kartas of one Hindu Undivided Family (HUF) and therefore, they are required to pay the applicable service tax; a Show Cause Notice dated 19.01.2013 was issued to the appellants demanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed under Notification No. 6/2005-S.T., dt. 1-3-2005, as amended, separately. The relevant notification reads as follows :- Service Tax exemption when value of taxable service provided not exceeds Rs. 4 lakhs in a financial year In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services of aggregate value not exceeding four lakh rupees in any financial year from the whole of the Service Tax leviable thereon under section 66 of the said Finance Act : Provided that nothing contained in this notification shall apply to, - (i) taxable services provided by a person under a brand name or trade name, whether registered or not, of another person; or (ii) such value of taxable services in respect of which Service Tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules, 1994. 2. The exemption contained in this notification shall apply subject to the following conditions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. For the purposes of determining aggregate value not exceeding four lakh rupees, to avail exemption under this notification, in relation to taxable service provided by a goods transport agency, the payment received towards the gross amount charged by such goods transport agency under section 67 for which the person liable for paying Service Tax is as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules, 1994, shall not be taken into account. Explanation . - For the purposes of this notification, - (A) brand name or trade name means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, logo, label, signature, or invented word or writing which is used in relation to such specified services for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified services and some person using such name or mark with or without any indication of the identity of that person; (B) aggregate value not exceeding four lakh rupees means the sum total of first consecutive payments received during a financial year towards the gross amount, as presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) followed in Deghamwala Estates (supra) case where under similar circumstances, the co-owners who received the rent income proportionate to their share had been assessed to income tax separately, but not as an association of persons. 8 . Hon ble Supreme Court, while discussing the meaning of association of persons in their judgment in the case of Commissioner of Income Taxv. Indira Balkrishna - 1960 (4) TMI 7-Supreme Court, observed as follows :- We now come to the main question in this appeal. What constitutes an association of persons within the meaning of the Income-tax Act? It has been repeatedly pointed out that the Act does not define what constitutes an association of persons, which under Section 3 of the Act is an entity or unit of assessment. Previous to the year 1924, the words of Section 3 were individual, company, firm and Hindu undivided family. By the Indian Income-tax (Amendment) Act of 1924 (XI of 1924) the words individual, Hindu undivided family, company, firm and other association of individuals were substituted for the former words. By the Income-tax Amendment Act of 1939 (VII of 1939) the Section was again amended and it then said : Where any Act of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons join a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must be one of the object of which is to produce income, profits or gains. This was the view expressed by Beaumont, C.J., in Commissioner of Income-tax, v. Lakshmidas Devidas at page 589 and also in Inre Dwarkanath Harischandra Pitale, In re B.N. Elias, Costello, J., put the test in more forceful language. He said : it may well be that the intention of the Legislature was to hit combinations or individuals who were engaged together in some joint enterprise but did not in law constitute partnerships When we find, . that there is a combination of persons formed for the promotion of a joint enterprise then I think no difficulty arises whatever in the way of saying that these persons did constitute an association We think that the aforesaid decisions correctly lay down the crucial test for determining what is an association of persons within the meaning of Section 3 of the Income-tax Act, and they have been accepted and followed in a number of later decisions of different High Courts to all of which it is unnecessary to call attention. It is, however, necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax on the total rent be collected from one of the co-owners. Another argument of the Revenue is that since the property is indivisible and not earmarked against each of the coowners, hence the Service Tax is leviable on the total rent received against the said property without apportioning against each of the co-owners in proportion to their share. We find fallacy in the said argument of the Revenue. Conceptually Service Tax is levied on the service provided, which is an intangible thing and hence it is not necessary to be identified with physical demarcation of the immovable property given on rent against individual co-owners. Once the value of service provided by a service provider is ascertainable Service Tax is accordingly charged. This Tribunal in similar facts and circumstances in the cases of DeoramVishrambhai Patel, Anil Saini Others and Luxmi Chaurasia (supra) after considering the issues raised, rejected the contention of the Revenue and allowed the benefit of exemption Notification No. 6/2005-S.T., dt.1-3-2005 as amended to individual coowners who jointly owned the property and provided the service of renting of immovable property, and received the rent in proportion to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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