2025-VIL-87-SC-ST
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SERVICE TAX Supreme Court Cases

Service Tax – Scope of Real Estate Agent - Respondent-assessee entered into Memorandums of Understanding (MOUs) with M/s Sahara India Commercial Corporation Ltd. (SICCL) for the acquisition, development, and management of land parcels for SICCL's real estate projects – Dept imposed demand of service tax and penalties holding that the respondent's activities fell within the definition of 'Real Estate Agent' under the Finance Act, 1994. However, the Appellate Tribunal allowed the assessee’s appeal, setting aside the demand and penalties - Whether the transactions between the respondent and SICCL fall within the ambit of 'Real Estate Agent' or 'Real Estate Consultant' under the Finance Act, 1994 - HELD - For a person to be covered under the definition of 'Real Estate Agent', there must be an act of rendering service. In order to fall within the ambit of Section 65(88) of the Finance Act, 1994, an individual or the entity must be engaged in rendering a service and such service must be in relation to sale, purchase, leasing or renting of a real estate and includes a real estate consultant - The mere transaction of sale and purchase of land does not bring a person within the scope of 'Real Estate Agent'. From the terms of MOUs it is found that the respondent did not act as a real estate agent or consultant, but rather as an intervening trader, bearing the procurement risk and earning or losing based on difference in sale consideration of land and the fixed price agreed upon in the MoUs - The activities undertaken by the respondent were not undertaken for service charges, commission, agency or consultancy but were plain and simple transactions of sale of land, which fall within the exception to the definition of 'Service' under Section 65B(44)(a)(i) of the Finance Act, 1994. Therefore, the respondent's activities did not fall within the purview of 'Real Estate Agent' or 'Real Estate Consultant' under the Finance Act, 1994 - the impugned judgment of the Appellate Tribunal is upheld and Revenue appeal is dismissed - Whether the appellant has established that the respondent deliberately suppressed facts, thereby justifying the invocation of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 – HELD - For the invocation of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994, the Dept-appellant must prove deliberate suppression and concealment of material facts by the respondent to evade tax liability. In the present case, the transactions were conducted through proper banking channels and duly recorded in the respondent's books of account, and there was no evidence of any wilful or deliberate suppression of facts by the respondent. Mere non-payment of tax, without any element of intent or suppression, is not sufficient to attract the extended limitation period.
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