Partnership or renting service

[S.C. WADHWA]

We have received rent from one of our building from the year 2007 to March 2015
on monthly basis as per agreement. 1) Fixed rent 2) variable rent of 5%
of sale value also on monthly basis. Now from April 2015 we are getting amount 40% of
gross sale value and no fixed rent will be received in future.
Dear Experts, We have received rent from one of our building from the year 2007 to March 2015 as per agreement i.e 1) Fixed rent 2) Variable rent @5% of Gross sale value per month. From April we are getting 40% of gross sale value. No fixed rent fill be received in future. No minimum guarantee of value. Now my query is whether we drafted a partnership deed and inform to the deptt that tenant has vacated the building or this 40% receipt to be treated as rental income. Please give your expert opinion immediately to enable us to deposit service tax if applicable well in time. Regards, WADHWA
Regards,
WADHWA

AI Summary

Renting of immovable property taxable as service when consideration flows; partnership deed may recharacterise receipts.
In the absence of a partnership, amounts received for permitting use of immovable property - fixed rent, percentage of sales, or a share of gross receipts - are consideration for Renting of Immovable Property and taxable as service tax on the gross amount. If a valid partnership deed shows the receipts are partners' profit shares unrelated to property use, those amounts may be treated as partnership income rather than taxable rent.