Case Law Details
Goyal and Co Construction Pvt Ltd Vs C.S.T. Service Tax (CESTAT Ahmedabad)
Facts- The appellant is engaged in providing Construction of Residential Complex & Construction of Commercial Complex Service and Real Estate Service. On the basis of information, an enquiry was initiated. Accordingly, revenue directed the appellant to produce documents/ details and information related to the financial statements and documents regarding disclose of income before the income tax authority under the Income Tax Disclosure Scheme (IDS) 2016. The Revenue approached the Deputy Director (Cost) to work out the gross receipts in respect of the cash amount of Rs. 32.50 Crores deposited in the bank/declared under IDS. The Deputy Director (Cost) after considering the various financial aspect, furnished report dated 22.10.2019 wherein the gross receipts/ revenue was worked out and estimated as Rs. 86,87,78,400/- The said investigation was culminated into show cause notice where the amount of Rs. 32,50,10,000/-considered as profit and gross receipts worked out at Rs. 86,87,78,400/- in respect of the said profit.
Demand of service tax of Rs. 3,90,95,028/- along with interest under Section 75 and penalty under Section 77 and 78 of the Finance Act, 1994 was proposed on gross receipt considered as taxable value towards rendering taxable service. The said notice was adjudicated by the Principal Commissioner, Ahmedabad vide impugned order. He confirmed the impugned demand along with interest and penalty and in addition, Penalty of Rs. 1 Lakh was also imposed on Shri Mukesh R Agarwal, Director of Appellant Company.
Conclusion- The activity of land sale is exempted from payment of service tax. We also observed that Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, where the entire consideration is received after issuance of certificate of completion by a competent authority also exempted from the service tax. In the present matter Appellant also produced the details of payment received after obtaining Business use (BU) i.e. sales of flats, shop etc. after receipt of the completion certificate. Therefore, it cannot be said that the income declared by the Appellant under IDS Scheme is attributable to the taxable service provided by them to their clients. In this case, evidence gathered by the Department is not sufficient to establish even the preponderance of probability. Therefore, the demand on the ground that the income declared under IDS scheme is earned from the taxable service is not sustainable.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
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Author Bio
INSTANT (reaction, to share own thoughts)
The report elsewhere bears the headlines: “Service Tax cannot be Levied merely based on Income declared under IDS: CESTAT”
In comparison, on the first blush, the headlines in the two reports are prima facie at variance. Further, the facts and circumstances as narrated, rather confusingly, so also the pleas advanced, in defence. contesting the impugned order and the grounds of the CESTAT Order, are too complicated to be readily understood in better perspective. Granting that and premised so, suggest a deep study of the TEXT, if were inclined to spare and share own viewpoints, on the grounds of the reported Tribunal Order !? 😁
courtesy