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Construction of complex service -The Appellants argue that there is no
relationship of service provider and service recipient between the
Developer and the Land Owner. According to them it is a relationship in a
joint venture for profit. Both the parties have joined together in the
business of construction of complex and
the land owner brings in the capital by way of his land. The Developer
by way of his capital and services and they jointly construct the
complex and use or sell the flats for profit. He argues that CBEC had
clarified the position that no service arises in such context. This
clarification dated 29-01-09 is examined later in this order.
On the contrary we find that the Joint Development agreement does not
indicate any terms on the above lines. The parties were neither taking
risks jointly or doing any common activity. There was no participation
by the land Owners in organizing or carrying out the activity. The Joint
Development Agreement as one in which the land owner transfers part of
his rights in the land and gets the value of such rights transferred, in
the form of constructed flats which consist of value of material used
and services rendered by the Developer. After the Land Owner transfers a
part of his rights through the agreement, his share of UDS is
registered in his name and he is like any other prospective buyer for
whom construction of complex is carried out under an agreement for
construction of flats except that he has a guaranteed right to get his
share of the number of flats constructed. We further examine the various
issues raised in the light of this finding.