renting of co-owned property

[Satbir singh wahi]

Property is co-owned with definite share and it is let out , rent is received individually with individual PAN and TDS.

Whether Service tax on Individuals or Joint coownership.

Department quoting Supreme court in the case of Raman Lal Bhai patel Vs. State of Gujarat 2008 (2) TMI 859 - Supreme Court Of India in civil appeal no. 4420 of 2004, in which to a question as to whether co-owners together are a person or not , the honourable SC in para 21 of the judgement has specifically held that '' if the co-owners proceed further and enter into an arrangement or agreement to have a joint enterprise or venture to produce a common result for their benefit , then the co-owners may answer the definition of person''

Pl guide .

AI Summary

Service tax treatment of rent from co-owned property depends on whether co-owners form a joint enterprise or act individually.
Whether rent from a co-owned immovable property is treated for service tax as income of individual owners or as a joint activity depends on whether co-owners have entered an arrangement to pursue a common result. Practitioners advise that each co-owner receiving rent may avail the statutory threshold exemption individually. A DGST clarification linking threshold shelter to single-title ownership is noted but treated as subordinate to notifications and circulars. CESTAT authority is cited to support that taxable treatment turns on the factual existence of an agreement creating a joint enterprise rather than mere co-ownership.