Figures Shown to Income Tax Authorities cannot be used to determine Service Tax Liability: CESTAT [Read Order]

The CESTAT, Kolkata bench, last week held that the figures shown to the income tax authorities cannot be used to determine the service tax liability.

The appellants,M/s Luit Developers Private Limited was intorenting immoveable property to various tenants. Third-Party data was received from CBIC Delhi by Dibrugarh Commissionerate regarding the appellant’s mismatch of income reflected in Form 26AS and ST3 Returns. Resultantly, the proceedings were initiated against the appellants and demanded service tax for the difference shown in the figures.

The Counsel for the appellant, Mr. Aakarsh Srivastava contended that figures reflected in Form 26AS cannot be used to determine Service Tax liability unless there is any evidence shown that it was due to a taxable service as held in Kush Constructions. Also, it was contended that the figures shown to Income Tax authorities cannot be used to determine Service Tax as held in Synergy Audio Visual Workshop Pvt Ltd and Deluxe Enterprises.

Accepting the above contentions, Judicial Member Mr. P K Chaudhary held that the appellant is a Pvt Ltd Company and figures in Form 26AS are already included in Revenue from Operations in the Profit/Loss Account of Balance Sheet, which is a public document, and therefore no suppression can be alleged as held in Hindalco Industries Ltd(supra).

“I also find that the Department has not adduced any positive evidence to show malafide intention for evasion of service tax and therefore extended period cannot be invoked as held in Pushpam Pharmaceuticals Limited(supra).Therefore, in view of the above discussions and decisions cited, the entire demand fails on merits as well as on limitation. Thus, there can be no imposition of Service tax, interest and penalty on the appellant. The impugned order cannot be sustained and is set aside. Accordingly, the appeal is allowed with consequential benefits,” the Tribunal said.

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