The Supreme Court today ruled in the case of Suraj Lamp & Industries Pvt Ltd Vs State Of Haryana that sale transactions carried in the name of general power of attorney will have no legal sanctity and immovable property can be sold or transferred only through registered deeds. “Transactions of the nature of `GPA sales or `SA/GPA/WILL transfers’ do not convey title and do not amount to transfer nor can they be recognised or valid mode of transfer of immovable property.

The Supreme Court has stayed an order of the Delhi High Court, which stopped the Centre from recovering service tax on renting of immovable property for commercial use, including shops and malls, from some firms. A Supreme Court bench comprising Just

: It cannot be held that renting of property did not involve any service as service could only be in relation to property and not by renting of property. Renting of property for commercial purposes is certainly a service and has value for the service receiver. Even if it is held that transaction of transfer of right in immovable property did not involve value addition, the provision cannot be held to be void in absence of encroachment on List II.(Para 22) It is well settled that competent legislature can always clarify or validate a law retrospectively. It cannot be held to be harsh or arbitrary. Object of validating law is to rectify the defect in phraseology or lacuna and to effectuate and to carry out the object for which earlier law was enacted. (Para 23) we do not find any ground to set aside giving of retrospective effect to the amendment from

Section 56 of the Income Tax Act, 1961 provides for taxability of income which is not chargeable to income-tax under any of the heads specified in section 14, items A to E thereof. It provides for such income to be chargeable under the residuary head

The government may lose over Rs 500 crore in service tax this year, as its decision to impose tax on eight new services and amend some existing ones has been challenged in three cases — copyright, immovable property and health check-up services provi

to restrain the respondents their servants, officers and agents from in any manner whatsoever giving effect to directly or indirectly or acting upon Notification 24/2007 dt. 22nd May 2007 and Circular No. 98/1/2008-SAT dt. 4-1-2008 as revived by Finance Act 2010 or levying or collecting any taxes on the basis that Section 65( 90a ), Section 65(105)(zzzz) read with section 66 Finance Act, 1994 and recovering any service tax on renting of immovable property from the petitioner pending disposal of the above Writ petition.

These FAQs seek to cover the broad spectrum of issues relating to acquisition and transfer of immovable property in India by a non-resident Indian (NRI) or a foreign national of Indian origin (PIO) or a foreign national of non-Indian origin as also by a person resident in India who is not a citizen of India. In case there are other issues to be resolved, a reference may be made to the Chief General Manager, Foreign Investment Division, Reserve Bank of India, Central Office, Mumbai 400 001.

In this Budget a retrospective amendment has been introduced in respect of the service of renting out of property for commercial purposes. Amendment has been made in the definition of “Renting of immovable property service” to provide explicitly that the activity of renting itself is a renting service. The change has given retrospective effect from June 1, 2007. This treatise seeks to explain the rationale and the background for the retrospective amendment for a proper appreciation of this action in the Budget.

The Delhi High Court in the Home Solution Retail India case had held that renting of immovable property is not a taxable service. The Government as usual filed an appeal in the Supreme Court and the whole Department is under the impression that by mere filing an appeal in the Supreme Court, the High Court order has become inoperative. So demands, threats, Show Cause Notices are playing wild games in the field. Even the TRU, by a letter dated 15.07.2009 directed the Departmental officers to either pursue the tax payers to pay up the service tax due or take necessary action to safeguard revenue as the dispute has not reached finality and the department has filed an appeal against the order of the Delhi High Court.

Attention of Authorised Dealer Category-I banks is invited to clause (c) of Regulation 2 of Notification No. FEMA 21/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India), Regulations, 2000, as amended from time to time, in terms of which ‘a Person of Indian Origin’ means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan)