Page 53 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] STARCITY ENTERTAINMENT PVT. LTD. v. COMMISSIONER OF S.T., MUMBAI 267
premium paid in advance - Such an arrangement has been held in catena of
decisions to be falling under scope of renting - Further, entire property and its
benefits had not been alienated inasmuch as right to built-up space above and
around contracted property had been retained - Thus, by no means it is a sale
agreement as contented by appellant - Activity of limited use of property for
consideration is clearly taxable under Renting of Immovable Property services
- Further, such taxability is for entire premium amount because premium is
nothing but rent received in advance - Case laws cited by appellant is restrict-
ed to transactions with entities of State Government in acquiring land - Sec-
tion 65(105)(zzzz) of Finance Act, 1994. [paras 6, 7, 8, 9, 10, 11]
Appeal dismissed
CASES CITED
Commissioner v. Greater Noida Development Authority
— 2015 (40) S.T.R. 46 (All.) — Referred ......................................................................................... [Para 3]
Greater Noida Industrial Development Authority v. Commissioner
— 2015 (38) S.T.R. 1062 (Tribunal) — Distinguished ............................................... [Paras 3, 4, 8, 10]
Greater Noida Industrial Development Authority v. Commissioner
— 2015 (40) S.T.R. 95 (All.) — Referred ......................................................................................... [Para 3]
Hobbs Brewers India Pvt. Ltd. v. Union of India
— 2016 (45) S.T.R. 60 (Tripura) — Relied on ...................................................................... [Paras 4, 7, 8]
RIICO Ltd. v. Commissioner — 2018 (10) G.S.T.L. 92 (Tribunal) — Relied on.................... [Paras 4, 7, 8, 9]
REPRESENTED BY : Shri Bharat Raichandani, Advocate, for the Appel-
lant.
Shri Dilip Shinde, Assistant Commissioner (AR), for
the Respondent.
[Order per : C.J. Mathew, Member (T)]. - This dispute on taxability un-
der Section 65(105)(zzzz) of Finance Act, 1994 arises from ‘conducting agree-
ment’ dated 5 April, 2002 in which the appellant, M/s. Starcity Entertainment
Pvt. Ltd., executed with the ‘conductor’, M/s. Movie Time, for granting ‘conduct-
ing rights’ which also included an option to purchase, or lease, the theatre be-
longing to them for lump-sum consideration of ` 4,00,00,000. It would appear
that, of this agreed sum, M/s. Movie Time placed ` 2,50,00,000 as interest free
security deposit while, on acceptance of the request, paid ` 43,250 per week as
‘lease rental’ till the transfer of property for 999 years on 14th August, 2007,
against ‘lease rent’ of ` 100 per annum, for a consideration of ` 1,25,00,000, ad-
justed from the security deposit, and on payment of an additional ` 50,00,000.
The demand of ` 21,63,012, as provider of ‘renting of immovable property ser-
vice’ between 1st July, 2007 and 31st March, 2009, was worked out on lease pre-
mium received and the lease receipts on which tax liability had not been dis-
charged and on the finding that the transaction layered under misleading de-
scription for that very purpose.
2. With the conclusion that
‘20. It can be seen that the Noticee had received Rs. 175 lakhs on account
of signing of a 999 years lease with M/s. Movie Time. Whether any amount
received on account of lease of 999 years would still be taxable under Rent-
ing of immovable property service would depend on whether leasing for
such amount of years would still remain a lease and not be considered as a
sale for all practical purposes as contended by the Noticee. It is seen that
though the judicial pronouncements are yet to be made as on date on this
GST LAW TIMES  20th August 2020  53