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Service Tax on Rent: Co-Owners Not One Entity for Threshold Calculation

Case Law Details

TaxGuru Citation
2025 taxguru.in 11480
Case Name
Goutam Mukherjee Vs Commissioner of Central Excise And Service Tax (Calcutta High Court)
Date of Judgement/Order
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Goutam Mukherjee Vs Commissioner of Central Excise And Service Tax (Calcutta High Court)

In the case of Goutam Mukherjee vs. Commissioner of Central Excise and Service Tax, the Calcutta High Court considered several substantial questions of law concerning the levy of service tax on rental income received by co-owners of immovable property. The appellant challenged the treatment of consolidated rent received from M/s. Vishal Retail Ltd., which was routed through a common bank account as per a Tripartite Loan Agreement with the State Bank of India for repayment of a jointly availed housing loan. The appellant questioned whether such consolidation could justify treating the co-owners as a single taxable entity, despite their separate ownership shares, distinct PANs, and independent income tax assessments. Further, the appellant contended that in the absence of a formal partnership, Hindu Undivided Family (HUF), Association of Persons (AOP), or Body of Individuals (BOI), they should be considered separate service providers for the purposes of service tax under the Finance Act, 1994. Additional questions raised included whether clubbing the rental income violated the small service provider exemption under Notification No. 06/2005-ST and whether the extended limitation under Section 73(1) of the Finance Act was invoked correctly in the absence of fraud or suppression.

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Author Info

CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 20,988

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