TaxTMI 
TaxTMI 
2026 (1) TMI 1222
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....als-I), Cochin. 2. Briefly the facts are that M/s. MFAR Enterprises Pvt. Ltd. Maradu P.O, Kochi, is a commercial concern owning land and buildings in Maradu, which have been leased to M/s. MFAR Hotels Ltd., Maradu. The Revenue alleging that the appellant was into renting of immovable property and had failed to discharge service tax, issued a show-cause notice demanding service tax on the amount received from their client for providing the service of renting of immovable properties. The original authority confirmed the demand of service tax which was upheld by the Commissioner (Appeals) in the impugned order rejecting the appellant's plea that they fall under the excluded category since they are into in the business of hotels. Aggrieved b....
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....i. 4. The Learned Authorized Representative (AR) for the Revenue reiterated the findings of the Commissioner (A) in the impugned order suggesting that the leasing of the property clearly falls under the category of 'renting of immovable property' and is not excluded as claimed by the appellant. 5. Heard both sides. The period of dispute is from June 2007 to March 2008. As per Section 65(105)(zzzz) during the disputed period, the definition of "Taxable Service" which means any service provided or to be provided to any person, by any other person, by renting of immovable property or any other service in relation to such renting for use in the course of or, for furtherance of, business or commerce. Explanation 1 - For the purpos....
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....enting of immovable property service". Appellant contends that based on the Delhi High Court's Order, renting of immovable property is not taxable. However by virtue of clause 76 of the Finance Act, 2010, Section 65(105) (zzzz) has been retrospectively amended and hence renting activity is taxable with effect from 1.6.2007. Explanation 2 - For the purpose of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for residential or any other purposes shall be deemed to be immovable property for use in the course or furtherance of business or commerce. 6. The Commissioner (Appeals) referring to the above definition observes as follows in the impugned order: ....
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....vice tax on the income received by the appellant is not justified. The Commissioner (A) has confirmed the demand based on Explanation 2 in the definition ignoring the fact that it is excluded vide Explanation 1 of the definition. This fact is also discussed and deliberated by the Tribunal in the case of Jai Mahal Hotels Pvt. Limited Versus Commissioner of C.EX., Jaipur 2014 (36) S.T.R. 669 (Tri. - Del.) dated 8-5-2014, wherein the Tribunal has observed as follows: "5. That the appellant had leased its buildings to M/s. Indian Hotels Company Limited is not in dispute not is it in dispute that the purpose of the transfer of the property in favour of the other party is for establishment of a hotel. The issue is whether in such circums....
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....le service, is set out in paragraph 6.5 of the order of the learned Appellate Commissioner dated 21-10-2011 (the subject matter of Service Tax Appeal No. 16 of 2012). The reasoning runs thus : The legislative intent [sub-clause (d)] is explicit and clear, not to tax immovable property used (not meant) for accommodation which includes hotels; only the service of accommodation provided by a hotel is outside the purview of the taxable service, while other services provided by a hotel such as services like mandap keeping, gym, spa, health club etc, are all taxable services. 9. In our considered view the above interpretation adopted by the Authorities below is fundamentally flawed. The taxable service falling within the scope o....