Transactions between two firms located in same premise.

[Rajesh Kumar]

R Sir/Madam,

Please guide, if two firms are registered at the same premise. So during sale and purchase, no movement of goods required. Now Department raised objection on the said transactions and denying ITC under Section 16 as goods not received from one another.

Eway bill was generated for formality.

AI Summary

Input tax credit eligibility depends on receipt of goods by title transfer even without physical movement, documentary proof required.
Availability of input tax credit hinges on receipt of goods or receipt in law; where two registered firms share premises, transfer of title by invoice can constitute receipt without physical movement. Documentary and accounting records such as invoices, stock registers, bank payments and CA certificates can substantiate receipt. Generation of E-way bills when no physical movement occurred raises suspicion but does not alone determine entitlement; the claimant must prove genuineness while the department must prove fraud.