AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1468
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 2015 to June 2017 16,15,944/- 019/2020 dtd. 15.09.2020 ST/40625/2020 2. The relevant facts, as borne out from the appeal records, are that the Department investigated Shri S. Bhupathi, the appellant herein, since the Department was of the view that the appellant is the owner of the property namely SB Towers, Sundarapuram, Coimbatore and had rendered taxable services under the category of renting of immovable property by leasing out the said property without obtaining necessary service tax registration, without discharging the service tax liability and without filing the statutory returns. Pursuant to the investigation, the department was of the opinion that the property known as SB Towers, though an HUF property belonging to individuals who formed members of the HUF, the appellant being the Karta of the HUF is to be regarded as the legal owner of the property. The department was further of the view that the memorandum of understanding between the members of the HUF, produced during the investigation, was an unregistered document that indicated that the property of the family have not been partitioned and that the titles have not been transferred in the names of the in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice in as much as the rental income of other co-owners was clubbed with that of the Appellant without impleading the other co-owners, especially when the Appellant has furnished the income tax pan and service tax registrations of others in his deposition dated 10.6.2013 and also the unregistered family settlement deed 27.12.2004, which were signed by other co-owners and are relied upon. Reliance is placed on the decision of the Hon'ble Tribunal, Chennai in the Final Order 40390-40403/2018 dated 7.2.2018 wherein the demand of central excise duty by clubbing the value of clearances of others was set aside for the reason that notices were not issued to others, whose value was clubbed with the other person. 6. It is further submitted that the contention of the Revenue that the MOU dated 27.12.2004 is not registered and that therefore the title of the property is still with the Appellant and being the Kartha of the HUF, Appellant is the sole service provider, are not sustainable because by way of family settlement deed dated 27.12.2004, the title of the property was transferred to others for the purpose of renting of such properties. It is only for the collateral purpose of renting a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome of the other co-owners of the property with that of the appellant without notice to them. Admittedly, the appellant in his statement dated 10-06-2013, had furnished details of the service tax registration of the co-owners as well as the rental income that has been received by them. The income tax pan numbers of these co-owners were also provided, along with their IT returns. It has been the contention of the appellant all along that the rental income derived from the property is shared amongst the co-owners in accordance with the extent of property designated for each such individual and that they were of the belief that the threshold exemption limit of exemption available for the small scale service providers would be available for the individual owners. In such circumstances, it was necessary for the Revenue to controvert these submissions and also incumbent upon Revenue to have put these co-owners to notice of the Revenue's intention to club their income with that of the appellant. These proceedings initiated behind the co-owners back are therefore vitiated on this count. 10. That apart, undisputedly, the appellant has produced a memorandum of understanding which narrates....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounted. In this regard the reliance of the appellant on the decision in Korukonda Chalapathi Rao & Another v Korukonda Annapurna & Sampathkumar (Civil Appeal 6141 of 2021) dated 01-10-2021 is apposite wherein the Apex Court noticed its earlier decision as under: "31. In Roshan Singh and Others v Zile Singh and Others, AIR 1988 SC 881, the question arose whether Exhibit P 12 in the said case was an instrument of partition and therefore inadmissible for want of registration under Section 49 of the Registration Act or whether it was merely a memorandum of family arrangement. This Court after referring to the document held as follows: "8. According to the plain terms of thie document Exh. P-12, it is obvious that it was not an instrument of partition but merely a memorandum recording the decision arrived at between the parties as to the manner in which the partition was to be effected. The opening words of the document Exh. P-12 are : 'Today after discussion it has been mutually agreed and decided that....' What follows is a list of properties allotted to the respective parties. From these words, it is quite obvious that the document Exh. P-12 contains the recital of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eviously completed partition between the parties, will be admitted in evidence even though they are unregistered, to prove the fact of partition: See Mulla's Registration Act, 8th Edn., pp 54-57." (Emphasis supplied) Thereafter, the Court also approved of the use of the said document for a collateral transaction and observed as follows: "11 Even otherwise, the document Exh. P12 can be looked into under the proviso to Section 49 which allows documents which would otherwise be excluded, to be used as evidence of 'any collateral transaction not required to be effected by a registered instrument'. In Varada Pillai v. Jeevarathnammal, (1919) 46 Ind App 285 : AIR 1919 PC 44 the Judicial Committee of the Privy Council allowed an unregistered deed of gift which required registration, to be used not to prove a gift 'because no legal title passed' but to prove that the donee thereafter held in her own right. We find no reason why the same rule should not be made applicable to a case like the present." " (Emphasis Supplied) 13. It is also seen that in the aforesaid decision in Korkonda Chalapthi Rao's case, the Apex Court cited with approval the following observation o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting the respective appellants inasmuch as 'association of persons' has been considered as a separate legal entity under the Income-tax Act for assessment and provided separate PAN number different from the PAN number possessed by individual co-owners; who joined together to form an 'association of persons'. In the present case, the show cause notices were issued in many cases to one person among the Joint owners and in other cases to all the persons who had jointly owned the immovable property provided on rent. Needless to mention, the Service Tax Registration of individual assessees for collection of Service Tax is PAN based, hence, collection of Service Tax from one of the co-owners, against his individual Registration for the total rent received by all co-owners separately, is neither supported by law nor by laid down procedure. Thus, it is difficult to accept the proposition advanced by the Revenue that all the co-owners providing the service of renting of immovable property be considered as an association of persons and the Service Tax on the total rent be collected from one of the co-owners. Another argument of the Revenue is that since the property is indivisible and not ea....