If
a property, jointly owned by two or more persons, is rented out by such persons
separately to a single person, all such co-owners would be eligible for small
service provider's exemption of Rs. 10 lakh separately.
Facts:
a) The assessees,
being co-owners of a building, rented out such building to a tenant and rent
was received by all such co-owners separately through different cheques;
b) Since
rent received separately by each co-owner did not exceed Rs. 10 lakhs, they
claimed threshold exemption under Notification No. 6/2005-ST, as amended;
c) The Department
argued that amount was to be assessed collectively and sought to club all
receipts alleging that separation was made with a view to gain tax benefit.
The
Tribunal held in favour of assessee as under:
1)
Rental agreement between parties clearly
provided that all co-owners were individually renting out such building to a
single person. Cheques were also separately received by them;
2)
Small service provider’s threshold
exemption speaks of aggregate value of taxable services and if, individually,
all co-owners were considered as separate service providers, their aggregate
value did not exceed exemption limit;
3)
Hence, prima facie, case was in favour of
the assessee and pre-deposit requirement was waived off accordingly- Dilip
Parikh v. Commissioner of Service-tax [2014] 41 taxmann.com 311 (Ahmedabad - CESTAT)
