TaxTMI 
TaxTMI 
2018 (6) TMI 810
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....id property on rent to M/s ICICI Bank Ltd. on monthly rent basis. The tenant bank is making payment of the rent individually to all the four owners of the above property by issuing separate cheques/demand drafts in their individual names. The Department is of the view that the registration of the property in four individual names and execution of rent lease agreement with M/s ICICI Bank in the separate names is only to evade the payment of the service tax by availing the threshold limit of Rs. 10 lakhs under SSI exemption Notification No. 8/2008 dated 01/03/2008 (which was 6/2005 dated 01/03/2005 previously) in each case. The case has been adjudicated originally by Additional Commissioner wherein it has been held that:- "7.7 I find that in....
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....is individually in the name of the four appellants who has entered into a joint lease agreement with the tenant namely M/s ICICI Bank Ltd. and the amount of rent on monthly basis has also been received by them separately and individually. As per the Income Tax Act all the four appellants who are recipient of the rent proceeds have to show their income in the individual name and has to pay rent under the Income Tax Act, 1962 accordingly. It has also been held by Hon'ble Supreme Court in the case of CIT vs. Shiv Sagar Estate that lease rent from property purchased jointly with specific shares is separately assessable in the hands of individual co-owner and not in the hands of association of persons. It has also been held in several orders of ....
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.... tax liability arises on such renting of property. 8. On deeper perusal of impugned order, we find that the first appellate authority has considered all the angles in the dispute and came to the correct conclusion. The findings of first appellate authority is as under. "6.2 On mere reading of the Order-in-Original, it is evident that the adjudicating officer has considered above named four persons as one person for determining tax liability and imposition of penalties without telling any legal basis for doing so. The appellants have contested the Order in Original mainly on the grounds that rented property belongs to four separate persons (all brothers) but the service tax has been demanded wrongly by the department from the appellants ....
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.... 2008-09 Rs. 36,27,024/- 3. 2009-10 Rs. 46,72,744/- 4. 2010-11 Rs. 52,63,304/- 5. 2011-12 Rs. 44,28,360/- But as the rent was distributed equally among each of the appellant, it is evident that each of them received an amount lesser than Rs. 8 lakhs and 10 lakhs in the years 2007-08 and 2008-09 respectively which is below the exemption limit of eight lakhs and ten lakhs during the relevant period. The appellants were, therefore, not liable to pay service tax on the amounts received by them during these two years by virtue of Notification No. 6/2005-S.T., dated 1-3-2005. The appellant's case is also supported by the Tribunal's decision in the case of Dinesh K. Patwa v. CST, Ahmedabed which is referred in para 3(ii) above. Howeve....
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....ment of Shri Chandulal Vishrambhai Patel is only referred to which was recorded on 22-2-2012 which is 8 days after the appellants had paid service tax along with interest on their own. Thus, the claim of the appellant that they had paid service tax for the years 2009-10 and 2010-11 on their own initiative and there was no suppression of facts etc. on their part with any intention of evade service tax cannot be denied. Considering all these facts, I agree with the appellant'0s contention that this case was squarely covered under sub-section (3) of Section 73 which provided not to issue any notice under sub-section (1) of Section 73 if the service tax not levied or paid was paid along with interest by the person concerned before service of no....