AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 232
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....into an agreement for lease of property for the purpose of hotel. They paid service tax and thereafter came to understand that hotels would not be covered within the purview of definition of "Renting of Immovable Property" as the building is used for the purposes of accommodation. A refund claim was filed which was rejected by the original authority as well Commissioner (Appeals). Hence this appeal. 2. On behalf of the appellant, learned counsel Ms. D. Naveena opened her arguments by adverting to the definition of taxable services as provided in section 65 (105) (zzzz) of the Finance Act, 1994. She submitted that the appellant had rented out the building to one M/s. Alankar Business Corporation Ltd., which is running a hotel in the said ....
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....was used as a hotel. In this regard, she relied upon the following cases:- (i) C.I.T. Andhra Pradesh Vs M/s. Taj Mahal Hotel, Secunderabad reported in 1971 (3) Supreme Court Cases 550; and (ii) C.I.T. Vs M/s. Lake Palace Hotels & Motels Pvt. Ltd, reported in (1996) 130 CTR 586. 3. Against this, the learned Authorised Representative Shri B Balamurugan reiterated the findings in the impugned order. He submitted that as per sub-clause (d) of clause (4) of Explanation 1 only, the buildings used solely for residential purpose are excluded. Therefore, that part of the building which is used for accommodation only would be excluded by the definition. Since the appellant-lessee is running a restaurant, coffee shop, banquet hall etc., the s....
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.... East (Restaurant) for Rs. 20,000/-, Tiffiny's (Coffee Shop) Rs. 20,000/-, Topaz (Banquet Hall) for Rs. 10,000/- and Gossip (Permit Room/Bar) for Rs. 10,000/-. Clause 4.1 as well as 4.4 is reproduced herein below , which would give clarity to the issue under consideration: 4.1 To use the Scheduled Property only for the business of running Hotel, Lodging House and allied and related activities as permitted by the LESSOR and not to use the SCHEDULE PROPERTY for any other purposes. 4.4 That in the carrying on of the Business of running in the Scheduled Property and/or allied or related activities such as, Restaurants, Caterers, Banqueters, Cafes, Bakers and Confectioners ad Permit Rooms (Bars) etc., and in the operation of any Infras....
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.... Room, Bar etc., are fixed separately. Only that part of the building which is used for accommodations would fall within the exclusion part of the definition. It is not the case that the restaurant coffee shop, permit room/banquet hall etc., are fully available only for the exclusive use of the lodgers, who stay in the hotel. It is also not the contention that these facilities are not open for use by those who do not stay in the hotel or for that matter that the hotel does not rent out including hall etc., for functions hosted by non-lodgers. Viewed in this light, we are not able to find any infirmity of the following conclusions of the lower appellate authority:- "I have given my careful consideration to the fact of the case and the ....
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....f accommodation including hotels, hostels, boarding houses, holiday accommodation, tents camping facilities as defined in Explanation 1(iv)(d) of section 65(105)(zzzz). Thus, the exemption claimed under Explanation 1(iv)(d) of section 65(105)(zzzz) of the Finance Act, 1994 in respect of the property in question appeared to be inadmissible. The lower authority has observed that the property is partly used for residential purpose and partly in the course of furtherance of business or commerce as described in Explanation 2 of section 65(105)(zzzz). Thus, the exemption claimed under Explanation 1(iv)(d) of section 65(105)(zzzz) of the Finance Act, 1994, in respect of the property in question is inadmissible and the service tax paid is correct. ....