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TMI Blog2021 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... nd accordingly chargeable to income tax as income of the subsequent year, if the payment or aggregate of payments made to a person in a day, exceeds twenty thousand rupees - such provisions of Section 40A(3A) of the Income Tax Act, have no relevance for the purpose of determination of liability under the provisions of service tax. Revenue cannot deny the giving of credit for the challan(s) deposited during investigation, or tax paid using cenvat credit. The respondent - Revenue is directed to reconcile the challan(s) with the assistance of the appellant and to give credit of each and every challan deposited by the appellant. Accordingly, this ground is also allowed in favour of the appellant. The substantial demand set aside, penalty under section 76 is set aside. Penalty under section 77(2) is reduced to ₹ 5,000/- per return or ₹ 15,000/- in total. Penalty under section 70 read with Rule 7C of Service Tax Rules is reduced to ₹ 5,000/-. Appeal allowed. - Service Tax Appeal No. 70244 of 2021 - FINAL ORDER NO.70225/2021 - Dated:- 28-9-2021 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Abhinav Kalra, Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable value (Higher of 26AS or P L A/c) Rate of S. Tax (incl. Cesses) in % Service Tax payable S. Tax paid any Net Service tax payable 2015-16 73549490 113326847 Work contract Not clear 113326847 14.50 16432393 - 16432393 2016-17 92472920 145552345 Word contract Not clear 145552345 15.00 21832852 - 21832852 Total 166022410 258879192 - - 258879192 - 38265245 - 38265245 It was alleged by the department that the appellant had provided taxable services for ₹ 11,33,26,847/- during the year 2015-16 and for ₹ 14,55,52,345/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the amount received by the appellant from Railways was not chargeable to service tax. However, the exemption was allowed for the taxable value of ₹ 1,45,70,105/- for the year 2015-16 and for ₹ 1,96,57,200/- for the year 2016-17, as was reflected in the Form 26AS for the relevant years, while the actual amount received or billed from railways during these years as per account books was ₹ 1,50,98,756/- for the year 2015-16 and ₹ 1,96,57,200/- for the year 2016-17. Thus, exemption on the value of ₹ 5,22,651/- involving service tax for ₹ 75,784/- has not been allowed to the appellant by the Ld. Commissioner in respect of the services provided to Railways. 7.1 Learned Counsel for the appellant further contended that the Commissioner have erred in disallowing exemption on the value of ₹ 5,22,651/- for services provided to Railway during the period 2015-16, which has been reflected in the profit and loss account, which figure has been adopted by the Revenue for the purpose of calculation of service tax liability. But in adjudication, the learned Commissioner has erroneously taken the figure as per Form-26AS which was less by this amount. Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available to the Adjudicating Authority for rejection of sales turnover. Even a best judgment assumption has to be based on documents and information on record. We further find after going through the provisions of Section 40A(3A) and (4), it has been provided - where an allowance has been made in the assessment for any year in respect of any liability incurred by the assessee for any expenditure, and subsequently during any previous year the assessee makes payment in respect thereof, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, the payment so made shall be deemed to be the profits and gains of business or profession and accordingly chargeable to income tax as income of the subsequent year, if the payment or aggregate of payments made to a person in a day, exceeds twenty thousand rupees. Sub section (4) further provides no person shall be allowed to raise, in any suit or other proceeding, a plea based on the ground that the payment was not made or tendered in cash or in any other manner. 12. Accordingly, we find that such provisions of Section 40A(3A) of the Income Tax Act, have no relevance for the purpose of determination of liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 7,28,15,722/- during 2016-17, respectively. 16. Having considered the rival contentions, we find that the learned Commissioner have erred in not allowing the abatement, though he have admitted use of materials. Accordingly, we hold that the appellant is entitled to abatement. We also hold that the Commissioner has erred in assuming that the appellant may have taken cenvat credit of duty or cess paid on any inputs. Such assumption for assessment is not available. Accordingly, this ground is allowed and tax liability has to be determined after allowing abatement at the prescribed rate. 17. Appellant further contends that while computing the demand of service tax on the work of laying of cables, the Ld. Commissioner has miserably failed to acknowledge that the said activity is covered under clarificatory Circular No. 123/5/2010-TRU dated 24.5.2010 and are as such exempted from levy of service tax per se. In this regard, the Ld. Counsel also relied on the decision of Tribunal Chennai in the matter of M/s Indian Telephone Industries Ltd. vs. Commissioner of GST Central Excise, Chennai South Commissionerate, which is squarely applicable to the present matter. In the said m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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