Merely because several persons jointly own an immovable property they cannot, therefore, be treated as ‘an association of persons or a body of individuals’.
These co-owners have not formed any association to provide taxable service.
Whether the shares are definite and specific or whether there is any scheme of management or not are all immaterial.
A common source of income should be the real test for ascertaining the existence of an association of persons.
Individual co-owners have come together to form association of person to rent out the property. The service provided is, therefore, indivisible. It can not be provided if one single co-owner recedes from the agreement for renting the property.
Revenue’s argument based on the indivisibility of the property fallacious.
Although the co-owners have jointly executed the contract and the service of renting the property cannot be supplied separately by any of the co-owners, it appears there is a judicial unanimity against treating the co-owners as an association of persons for taxation where their income from renting is separately ascertainable and assessed for income tax individually at the hand of each co-owner.
Conceptually, service tax is levied on the service provided, which is an intangible thing and hence it is not necessary to be identified with the physical demarcation of the immovable property given on rent against individual co-owners.
The Applicant and the other co-owners cannot be treated as an association of persons and, therefore, as a person defined under section 2(84)f of the GST Act, where their income from renting is separately ascertainable and assessed for income tax individually at the hand of each co-owner.