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TMI Blog2019 (1) TMI 1820X X X X Extracts X X X X X X X X Extracts X X X X ..... - The expression turnover is not defined in the Notification No. 25/2012-S.T. or in the Finance Act, 1994, and hence in order to interpret the meaning of the said term, in Serial No. 6 of Notification No. 25/2012-S.T., the common parlance meaning of the said term as understood by those dealing in accounts and taxation would have to be taken. The amount of increase in inventory, which the lower authorities have treated as turnover, is not a sale by the appellant. To the contrary it is only purchase of inventory by the appellant and by no stretch of imagination the same can be construed as turnover - Once the amount pertaining to Changes in Inventory of work in progress is excluded from turnover, admittedly the amount remaining is less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for claiming refund of Service Tax wrongly paid on receiving legal consultancy services, for the period of October 2012 to December 2012, along with all relevant documents including its profit and loss account for the year ending 2011-12. 4. Both the lower authorities took the view that the exemption is not available to the appellant. The lower authorities were of the view, that the turnover of the appellant is more than Rs. Ten lakhs. The appellate authority whose order is assailed before us, also went on to hold that the exemption is available only to the service provider, and not to the service receiver, paying tax under reverse charge basis. 5. For the purpose of ascertaining the turnover of the appellant, the Adjudicating Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owhere defines the term Turnover , neither does Finance Act, 1994 defines the said expression. It is therefore his submission that the expression turnover must have its ordinary meaning as understood in common parlance by the trade, industry and professionals. 9. For this purpose, our attention was drawn to the following judgments and authoritative texts issued by the professional bodies dealing with accountancy profession : a. Commr. of Income Tax V-ll, New Delhi v. Punjab Stainless Steel Indus. - 2014 (307) E.L.T. 214 (S.C.), in which the Hon ble Supreme Court held as under :- The Ld. Counsel submits that in the said judgment it has been held that normally, the term turnover would show the sales effected by a business unit. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that changes in inventory of work in progress as appearing in the Financial Statement cannot be included in the turnover, as the amount reflects purchases and not sales. To further elaborate, it has been explained that the opening and closing balance of changes in inventory of work in progress, represents purchased inventories during the year. It is therefore submitted that the purchase of stocks cannot be considered as turnover, and the lower authorities have erred in holding otherwise. The Appellant submits that if the said increase in inventory is excluded, the balance turnover would be less than ₹ 10 lakhs and hence the appellant would be eligible to claim the exemption. 11. Per contra the Ld. DR has supported the findings in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjab Stainless Steel Indus. 2014 (307) E.L.T. 214 (S.C.), in which the Hon ble Supreme Court held as under : 18. In the aforestated circumstances, one has to look at the meaning of the term turnover in ordinary accounting or commercial parlance. 19. Normally, the term turnover would show the sale effected by a business unit. It may happen that in the course of the business, in addition to the normal sales, the business unit may also sell some other things. For example, an assessee who is manufacturing and selling stainless steel utensils, in addition to steel utensils, the assessee might also sell some other things like an old air conditioner or old furniture or something which has outlived its utility. When such things are dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the term turnover . 5.2 In the Guidance Note on Terms Used in Financial Statements published by the ICAI, the expression Sales Turnover (Item 15.01) has been defined as under :- The aggregate amount for which sales are effected or services rendered by an enterprise. The term gross turnover and net turnover (or gross sales and net sales ) are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts . 5.3 The Guide to Company Audit issued by the ICAI in the year 1980, while discussing sales , stated as follows : Total turnover, that is, the aggregate amount for which sales are effected by the company, giving the amount of sales in respect of each class of goods de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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