service tax on co-owned immovable property

[satbir singhwahi]

Sir

PLs give the latest high court decision in this regard.

[KASTURI SETHI]

Dear Sir,

I tried my best to locate the judgement but could not find. If any expert or querist comes to know, let me know. I read the case laws daily but I think there is no judgement of High Court on this issue.

[Ganeshan Kalyani]

Sir just to know what is your query exactly.

[satbir singhwahi]

Sir

Senior professional quoted at service tax seminar in ludhiana that coowned immovable properties will be be assessed as AOP as held by High court.My query is if rent is received by each individual seperately under his PAN and bank a/c and registered deed with definite share with each individual then why to be assessed as AOP.

[KASTURI SETHI]

Sir,

The department has accepted the judgtement CESTAT Mumbai in the case of DEO RAM VISHRAMBHAI PATEL.  2015 (9) TMI 790 - CESTAT MUMBAI How the question of AOP arises ?

[satbir singhwahi]

Sir

We quoted this case but the Addl Commissioner has taken negative view. Also Commissioner appeals at Chandigarh is against.

[CSSANJAY MALHOTRA]

Dear Sh. Kasturi ji,

I was about to quote the same citation which has already been referred to by your goodself.

Further Satbir ji, please note that may be the facts of the case in high court would have different footing as Important is the concept of AOP. If same exists, then Service tax is payable (as some AOP works for firms common objective and furthermore maintain firm accounting records).

AOP is not liable to service tax and each co-owner is liable to tax once their threshold limit exceeds beyond ₹ 10 Lakh. Important is to satisfy the appellate authorities as to non-existence of AOP i.e. separate Income Tax returns of Individuals, separate receipts collection, each individual share defined, TDS deduction co-owner wise..

Please do make a note that definition of "Person" was incorporated into Service Tax Act from 01.04.2012 onwards, hence prior period cases, you can refer to General Clause or Income Tax Act for definition.

Dept will go by DGST letter F.No. V/DGST/VIII-RIP3/139/2011-12/202 dated 07.03.2013, wherein they will treat the property as one if the same is held by various co-owners. (CESTAT will decide in the issue in your favour)

[satbir singhwahi]

Sir

pl Give copy of DGST letter F.No. V/DGST/VIII-RIP3/139/2011-12/202 dated 07.03.2013.

AI Summary

Service Tax Implications for Co-Owned Property: Individual Assessment vs. Association of Persons (AOP) Debate A discussion on service tax implications for co-owned immovable property, initiated by an individual, sought clarity on whether such properties should be assessed as an Association of Persons (AOP). Despite a senior professional's seminar claim, the querist questioned this assessment when rent is received individually with distinct PANs and bank accounts. A referenced CESTAT Mumbai judgment was not accepted by the Additional Commissioner and Commissioner Appeals. Another contributor noted that AOP is not liable for service tax, emphasizing the importance of demonstrating separate ownership and tax filings. The discussion also mentioned a DGST letter relevant to the issue.