2026 (6) TMI 316

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....Appeals) confirmed the demand of service tax amounting to Rs. 46,96,800/- along with interest and equal penalty. 2. The brief facts of the case are that the appellant was engaged in providing services of 'Construction of Residential Complex Service' and 'Construction Service other than Residential Complex' and was registered under the Service Tax Department. In the due course of business of construction and development, appellant transferred the Land Development rights along with the exclusive rights, interest and entitlement to M/s GRJ Distributors and Developer Private Limited vide Collaboration Agreement dated 10 June 2013.  Thereafter, an audit was conducted by the Department in November 2015 for the period April 2012 to....

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.... learned counsel for the appellant and the learned Authorized Representative for the respondent.  We note that the present issue is squarely covered by the decision of the Tribunal in the case of M/s Genius Propbuild Private Limited vs. Commissioner of Central Excise and CGST, Jaipur.  The relevant paras are reproduced hereinafter:- "4. The issue for consideration is whether the 'transfer of development rights' amounts to rendering of service under the head 'sale of development rights', on which service tax is payable by the appellant.  Xxxxx xxxxx  xxxxxxx  xxxxxxx 7. Considering the decisions referred, we find that the Bombay High Court in Chheda Housing Development Corporation versus Bi....

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....oper to it for transfer of land development rights only. Thus, it is the ownership of the land, which stands transferred effectively by the land-owning company in return of consideration payable by the developers. The moment it is either land or "benefits arise out of land", it goes outside the purview of "Service" as defined in Section 65B(44) of Finance Act, 1994. Under the Development Agreement dated 5-122006, it is stated that there would be transfer of Development Rights in future and the Developer were permitted to carry out the developmental activities as per clause 2.2 of the Development Agreement, wherein the developer is permitted to enter the scheduled property for carrying out developmental activities. After the developmental ac....