2025-VIL-1695-CESTAT-AHM-ST
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SERVICE TAX CESTAT Cases

Service Tax – Section 65B(44) of Finance Act, 1994 – Transfer of tenancy right – Receipt of consideration – Tax liability – During audit of records of Appellant, audit officers found that Appellant had transferred Tenancy and Occupancy Right of building for a consideration, but did not pay service tax on consideration amount – Department issued show cause notice, proposing recovery of service tax, to Appellant – Adjudicating authority confirmed demand of Service Tax – Commissioner (Appeals) upheld order of lower authority and rejected appeal filed by Appellant – Whether transfer of occupancy and tenancy rights in respect of immovable property is covered within definition of Service as defined under Section 65B(44) of the Act – HELD – As per Section 65B(44) of the Act, Service means any activity carried out by a person for another for consideration and includes a declared service, but shall not include an activity which constitutes merely a transfer of title in goods or immovable property by way of sale, gift or in any other manner. Appellant submitted a copy of their declaration, which mentions receipt of consideration for surrendering and relinquishing their Tenancy and Occupancy Rights in respect of building. Said consideration is a sort of compensation received by Appellant from owner for surrendering and relinquishing Tenancy and Occupancy Rights. Activity of transfer of tenancy and occupancy rights in respect of immovable property does not come within definition of ‘service’ as defined under Section 65B(44) of the Act. Consequently, amount received in lieu of transfer of tenancy and occupancy right is not liable to service tax. Order under challenge is set aside – Appeal allowed
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