TaxTMI 
TaxTMI 
2026 (8) TMI 928
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....llers/purchasers of plots and as builders/developers of residential/commercial complexes and is registered with Service Tax Registration No. AADCS9234LST001, having registered office at 11th Floor, Shalimar Titanium Building, Vibhuti Khand, Gomti Nagar, Lucknow - 226010. 3. The impugned proceeding is the result of search conducted at the premises of M/s Gemini Developers, Gorakhpur and M/s Limelite Tradecom Pvt. Ltd. Gorakhpur wherein documents pertaining to residential project 'Shalimar Gallant' were recovered by the department 4. The project 'Shalimar Gallant', was developed in terms of builder agreement among M/s Shalimar Corp Ltd., M/s Gallant Udyog Limited & M/s Limelite Tradecom Pvt. Ltd. and revenue from sale of flats was shared by them. The project was launched for sale of plots for villas and residential complexes at Vigyanpuri, Mahanagar, Lucknow. Since, the project was offered for land as well as residential flats, the Appellant collected a sum of Rs. 27 crores for construction and sale of residential flats and Rs. 30 crores against sale of plots. That appellant has discharged due service tax liability on Rs. 27 crores vide challan dated 28.12.2016 ....
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................................." d. Thus, the present Order which does not provide any cogent reasoning for upholding demand of tax is a nonspeaking Order in direct violation of the Supreme Court mandate as well as the Constitutional 'Right to a Fair Trial'. B. That tax has been paid in full by the Appellant suo moto on actual income of Rs. 27 crores with respect to project Shalimar Gallant - * The project 'Shalimar Gallant' was launched for sale of plots for villas and residential complexes at Vigyanpuri, Mahanagar, Lucknow. The Appellant collected a sum of Rs. 27 crores for sale of residential flats under such project, and the same was duly reported in the Appellant's Financial Statements. * Further, service tax amounting to Rs.1,31,62,646/- (including interest of Rs.19,51,828/-) was duly paid on such amount of 27 crores vide GAR-7 challan dated 28.12.2016, i.e. before the issuance of Show Cause Notice. The same has been admitted by the Department in Paras 3 & 8 of Show Cause Notice as well as Para 3 of impugned Order. * Hence, the demand of tax, interest and penalty imposed on such amount of 27 crores in impugned Order, despite full pay....
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....he basis of unsubstantiated third party information seized during search are illegal and unsustainable - The entire proceedings against the Appellant in the present case have been undertaken on the basis of certain unsubstantiated and uncorroborated third party information that have been seized by the Revenue during the search undertaken at the premises of a third party, as enumerated in Para 2 of Notice. It is an admitted and established fact that such third-party information do not form part of the books of accounts of the Appellant. These are irrelevant and unrelated to the Appellant's books of accounts and as such cannot form the basis of imposing demand. However, the Revenue has still confirmed demand on the basis of the same. It is a settled legal position that third party information do not form part of books of accounts and are irrelevant and inadmissible. In this regard, the Appellant would like to place reliance on the following case laws - * Hon'ble Supreme Court of India in the case of Common Cause a Registered Society & Ors. Vs. UOI & Ors. [2017TIOL-27-SC-MISC] held that investigation cannot be initiated on the basis of records not maintained in the r....
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....as followed, which is reproduced below: "Though the confessionals statement may be the starting point of investigations but in view of the other evidence available on record and in the absence of the other evidence indicating. clandestine removal, the same cannot be made the sole basis for deciding against the assessee. To the same effect is the decision of the Hon'ble Delhi High Court in the case of Commissioner of Income Tax v. Dhingra Metal Works 2010TIOL-693-HC-DEL-IT laying down that though an admission is extremely important piece of evidence, it cannot be said to be conclusive." 4.3 Accordingly, we do not find any infirmity in the order of the Commissioner (Appeals) to this extent." * Madhya Pradesh High Court in case of Beni v BisanDayal [A.I.R 1925 Nagpur 445] held that - "Where it was observed that entries in books of accounts are by not themselves sufficient to charge any person with liability,the reason being that a man cannot be allowed to make evidences for himself by what he chooses to write an his own books behind the back of the parties. There must be independent evidence of transaction to which the entries relate an....
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....hat the Appellant had received income of Rs. 30,71,62,950/- in lieu of sale of residential Flats. No evidence has been brought on record by Department to prove such presumption and the evidences submitted by the Appellant have been mechanically disregarded. It is submitted that taking into consideration that the disputed period pertains to FY 2013-14, the Appellant has already provided all documents within its possession within the standards of reasonableness and practicality. Even otherwise, the burned on proving taxability lies squarely on the Revenue and demand cannot be imposed based on presumptions. The Finance Act, 1994 does not provide for any provision wherein the burden of proof with respect to alleged taxability of a transaction is on the taxpayer. In this regard, Appellant places reliance on decisions of this Bench in the cases of M/s Ratan Housing Development Ltd. V/s Commissioner of Customs, Central Excise & Service Tax, Kanpur [ST Appeal No. 70613/2017] and M/s Shyam Construction v/s Commissioner of Customs, Central Excise & Service Tax, Kanpur [ST Appeal No.70516/2016]. G. Extended period of limitation is not invocable :- Section 73 of the Act provi....
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....t, on the Appellant. It is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. This Court observed in Union of India Vs. Ashok Kumar & Ors. that "it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility." In the present case, the period covered is FY 2013-14. The Show cause notice was issued as on 23.10.2018 and therefore, the entire demand is time barred. Thus, the invocation of extended Limitation period in the impugned order is unlawful. H. No interest or Penalty is payable in the present case The Appellant submits that the demand of service tax confirmed in the impugned order is not sustainable, the demand of interest and penalty thereon is liable to be set aside. Since, the underlying demand does not exist, there arises no question of interest or penalty. In the present case, there was no intent to evade tax on part of the Appellant nor was there any fraud, misstatement or su....
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....lant is legally not sustainable and hence we set aside the same. 13. Regarding the service tax liability of Rs.27 crores, confirmed in connection with rendering of service of 'Construction of Residential Complex Service', we find that the Appellant have paid the Service Tax amounting to Rs.1,31,62,646/- (including interest of Rs.19,51,828/-) vide GR-7 Challans dated 28.12.2016 before issuance of the Show Cause Notice. The relevant GR-7 Challan submitted by the Appellant is extracted below for ready reference. 13.1 We find that the payment of service tax has been admitted by the Department in Para 3 to 8 of the Show Cause Notice and Para 37 of the impugned order. Thus, it is evident that the Appellant has paid the Service Tax payable in respect of rendering of the service namely 'Construction of Residential Complex Service', before the issuance of the Show Cause Notice. Hence, we do not find any reason to demand the service tax from the Appellant by way of issue of the Show Cause Notice. Section 73 of the Finance Act, 1994 provides that if the service tax payable has been paid along with interest before the issuance of the Show Cause Notice, then there is no need to issue the ....