Chhattisgarh Steel Castings (P) Ltd. Vs Union of India (Chhattisgarh High Court)
Service Tax Liability Upheld on ‘Other Income’ from Property Sales: Chhattisgarh HC Rules on Real Estate Agent Status: The High Court confirmed service tax liability and penalty on a company for receiving income from quick property flips, ruling that the transaction structure (agreement to purchase and direct sale to third party) qualified the company as a “Real Estate Agent,” not a simple buyer/seller. The Court held the extended limitation period was applicable due to suppression of the true nature of the income.
Property Flipping Subject to Service Tax: HC Affirms Penalty for Suppression of Real Estate Agent Activity: The ruling confirmed that an industrial company was liable to pay service tax as a “Real Estate Agent” on profits from property transactions where they contracted to buy but sold the right to a third party. The penalty under Sections 77 and 78 was upheld as the company suppressed the facts by showing the income simply as ‘other income’.
When is a Seller a Real Estate Agent? High Court Clarifies Service Tax Scope on Difference in Land Sale Value: This case clarified the definition of a “Real Estate Agent” for service tax purposes, holding that a company that entered into purchase agreements and immediately assigned the sale to a third party for a profit acted as a service provider. The appeal was dismissed, validating the service tax demand and the penalty for willful suppression of facts.
