Builder partnership
This query is : Resolved
28 December 2013
Hello my query is
One partnership firm has built a residential complex containing 25 flats. The firm has 5 partners.
Out of the above 25 flats 20 were sold and 5 remained unsold. The partners distributed the remaining 5 flats among themselves and the flat registry is also done.
Whether service tax is payable on this 5 flats distributed among patners?
If yes then what is the amount to be considered as gross amount reveived?
Thanking You
Gaurav Bhartiya
One partnership firm has built a residential complex containing 25 flats. The firm has 5 partners.
Out of the above 25 flats 20 were sold and 5 remained unsold. The partners distributed the remaining 5 flats among themselves and the flat registry is also done.
Whether service tax is payable on this 5 flats distributed among patners?
If yes then what is the amount to be considered as gross amount reveived?
Thanking You
Gaurav Bhartiya
28 December 2013
Basic rule of service tax, if there is consideration then service tax be charged, perhaps in your case, this element is missing and therefore it appears that it is free of cost, or likely in the nature of gift, so no service tax.
Further, consequent application of section-45 & 28.
Further, consequent application of section-45 & 28.
28 December 2013
Thank You Sanjeev Kumar Sir for your reply.
Sir the registry is done at cost to the partners and the amount is debited to partners capital account. So could this be considered as consideration?
Thank You
Sir the registry is done at cost to the partners and the amount is debited to partners capital account. So could this be considered as consideration?
Thank You
28 December 2013
The query is still open.
28 December 2013
It is not relevant that capital has been debited.
Understand the logic ;
1) Partner are representative of firm, and thats a reason only firm is assessed for profit in income tax and partner shares is exempt.
2) In service tax, the rule 3 of SERVICE TAX (DETERMINATION OF VALUE) RULES, 2006 is not apply.
3) Its simply that firm has not received any consideration.
I can give number of reason, but i hope you are satisfied with that...
Understand the logic ;
1) Partner are representative of firm, and thats a reason only firm is assessed for profit in income tax and partner shares is exempt.
2) In service tax, the rule 3 of SERVICE TAX (DETERMINATION OF VALUE) RULES, 2006 is not apply.
3) Its simply that firm has not received any consideration.
I can give number of reason, but i hope you are satisfied with that...
28 December 2013
Thank You very much sir.
29 December 2013
Hello Sir
There is one request is there any case law or notification on the above topic?
Thanking You
There is one request is there any case law or notification on the above topic?
Thanking You
29 December 2013
I do not have the case reference, perhaps, that is the interpretation of law.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS 194-T applicability
- GST ITC REVERSE
- Fixe term employment
- Is any professional CA is here please reply
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Putting a heading on received mail
- Consolidated financials
- Reprocessing of rectification order AY 2025-26
- Section 50-fixed asset-->building ceases to exist
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- TDS on TRUST
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
