{"id":6697,"date":"2025-11-07T18:19:26","date_gmt":"2025-11-07T12:49:26","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=6697"},"modified":"2025-11-07T18:19:26","modified_gmt":"2025-11-07T12:49:26","slug":"no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat","title":{"rendered":"No Service Tax on Rent from Jointly Owned Property\u2014No AOP Formed | CESTAT"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/excise-service-tax\/101010000000409811\/no-service-tax-on-rent-from-jointly-owned-property-where-alleged-aop-existed-only-for-bank-loan-cestat\">Chndar Sharma Ashok Sharma And Associates vs. Commissioner of Central Excise and Service Tax, Chandigarh-I (2025) 35 Centax 224 (Tri.-Chan)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>S\/Shri S.S. Garg<\/strong>, Member (J) &amp; <strong>P. Anjani Kumar<\/strong>, Member (T)<\/li>\n<li><strong>Shri Sudeep Singh Bhangoo<\/strong>, Advocate, for the Appellant.<\/li>\n<li><strong>Shri S.K. Meena<\/strong>, Authorised Representative, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>Four individuals had jointly constructed a building by obtaining a loan from a bank under a tripartite agreement with a group of companies and subsequently leased the premises to different companies. The Department alleged that these individuals had formed an association of persons (AOP) for the purpose of earning lease rent and demanded Service Tax under the category of \u2018Renting of Immovable Property\u2019 service. It was contended that the alleged AOP was not in existence or registered and that the premises was registered in the respective names of the individuals. Each individual had received rent for his share separately and had also obtained Central Excise registration individually and started paying Service Tax. The Department relied on the statement of one individual indicating that they had jointly approached the bank for a loan, which was stated to be misconstrued. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).<\/p>\n<h2><em>CESTAT Held<\/em><\/h2>\n<p>The CESTAT held that the demand of Service Tax on lease rent received from the alleged AOP could not be sustained when the premises was registered in the names of the individual owners and the rent was received separately by them. It was observed that the statement relied upon by the Department only showed that the individuals had come together to obtain a bank loan and did not establish existence of an AOP. The Tribunal noted that the Department had failed to produce any evidence showing formation or registration of the alleged AOP. Following the decision of the Coordinate Bench in <a href=\"https:\/\/www.centaxonline.com\/search?searchData=2017%20(51)%20S.T.R.%201146%20(Tri.%20-%20Mumbai)&amp;itemType=AP\">Deoram Vishrambhai Patel<\/a> [2017 (51) S.T.R. 1146 (Tri. &#8211; Mumbai)] and referring to Sections 65(90a) and 65(105)(zzzz) of the Finance Act, 1994, it was held that the lease rent received by the individual owners could not be subjected to Service Tax under Renting of Immovable Property service. The appeal was accordingly allowed.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2017%20(51)%20S.T.R.%2038%20(Tri.%20-%20Chan.)&amp;itemType=AP\">Anil Saini v. Commissioner<\/a> \u2014 2017 (51) S.T.R. 38 (Tri. &#8211; Chan.) \u2014 Noted [Paras 4, 7]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2017%20(51)%20S.T.R.%201146&amp;itemType=AP\">Commissioner v. Deoram Vishrambhai Patel<\/a> \u2014 2017 (51) S.T.R. 1146 (Tri. &#8211; Mum.) \u2014 Followed [Paras 4, 7]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Chndar Sharma Ashok Sharma And Associates vs. Commissioner of Central&hellip;<\/p>\n","protected":false},"author":8,"featured_media":6709,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,51,63],"tags":[],"class_list":["post-6697","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-excise-service-tax","category-news-excise-service-tax","category-est-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>No Service Tax on Rent from Jointly Owned Property\u2014No AOP Formed | CESTAT<\/title>\n<meta name=\"description\" content=\"CESTAT rules that rent from jointly owned property is not taxable as alleged. AOP didn\u2019t exist; individuals received rent separately and paid tax individually; demand set aside.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"No Service Tax on Rent from Jointly Owned Property\u2014No AOP Formed | CESTAT\" \/>\n<meta property=\"og:description\" content=\"CESTAT rules that rent from jointly owned property is not taxable as alleged. AOP didn\u2019t exist; individuals received rent separately and paid tax individually; demand set aside.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat\" \/>\n<meta property=\"og:site_name\" content=\"Centax-Blogs\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/centaxindia\" \/>\n<meta property=\"article:published_time\" content=\"2025-11-07T12:49:26+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2025\/11\/1.-No-Service-Tax-on-Rent-from-Jointly-Owned-Property\u2014No-AOP-Formed-CESTAT.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"470\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Kriti Sharma\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Kriti Sharma\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat\"},\"author\":{\"name\":\"Kriti Sharma\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#\/schema\/person\/ec6616ec60dcf123f90d827e5ad10270\"},\"headline\":\"No Service Tax on Rent from Jointly Owned Property\u2014No AOP Formed | CESTAT\",\"datePublished\":\"2025-11-07T12:49:26+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat\"},\"wordCount\":386,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2025\/11\/1.-No-Service-Tax-on-Rent-from-Jointly-Owned-Property\u2014No-AOP-Formed-CESTAT.jpg\",\"articleSection\":[\"Excise &amp; Service Tax\",\"News\",\"Case Chronicles\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat\",\"url\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat\",\"name\":\"No Service Tax on Rent from Jointly Owned Property\u2014No AOP Formed | CESTAT\",\"isPartOf\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.centaxonline.com\/blog\/no-service-tax-on-rent-from-jointly-owned-property-no-aop-formed-cestat#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.centaxonline.com\/blog\/wp-content\/uploads\/2025\/11\/1.-No-Service-Tax-on-Rent-from-Jointly-Owned-Property\u2014No-AOP-Formed-CESTAT.jpg\",\"datePublished\":\"2025-11-07T12:49:26+00:00\",\"description\":\"CESTAT rules that rent from jointly owned property is not taxable as alleged. 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