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TMI Blog2015 (9) TMI 1724X X X X Extracts X X X X X X X X Extracts X X X X ..... it appears that the AA agreed with the Appellant that the entire sum received by the Appellant for purchase of land could not form the basis for computation of the service tax - It further prima facie appears that the AA overlooked the fact that even as per the SCN no land in Kurukshetra was purchased although the Appellant received money for that purpose. The Appellant's explanation that it returned the said sum to SICCL in the form of shares in 13 of its group companies does not appear to have been considered. The Court is satisfied that the Appellant has made out a prima facie case and that the balance of convenience at this stage in making a conditional order of pre-deposit is in favour of the Appellant. Although the Court is not expressing any opinion on the contention of the Appellant that no taxable service has been rendered by it, and that in any event the entire profit earned by it cannot constitute the value of such services, the Court, for the purposes of determining the reasonable amount of pre-deposit to be made by the Appellant, takes note of the fact that the Appellant has after making a loss of ₹ 34,25,435 in regard to the purchase of land at Sriga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MOUs having been entered into between SI and the Appellant and set out in a tabular form the details of the sums received by the Appellant and the consequent transactions of purchase of land as under: Sl.No. Name of the party/associate Place/site Amount of payment made under land purchase account till date (in Rs.) Area of land transferred/ registered till date (in acres) Amount per sale deed (in Rs.) Under development head 1. M/s. Elegant Developers Sriganganagar 13,99,59,165 118.60 14,33,84,600 5,01,27,107 Vadodara 12,32,59,700 120.232 7,57,14,631 4,14,90,300 Kurukshetra 74,06,63,550 Nil 8,18,36,049 4. The case of the Appellant has been that while it made loss as regards the transaction concerning the purchase of land at Sriganganagar, it made a profit as regards th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pointed out that the SCN itself sets out the fact that the Appellant made a loss as regards the purchase of land at Sriganganagar and a profit as regards the purchase of land at Vadodara. He reiterated the submission that the amount received for the purchase of land in Kurukshetra was returned by it in the form of allotment of shares in 13 group companies in favour of SICCL. The SCN itself showed that no land was in fact purchased at Kurukshetra. He submitted that with the AA having agreed with the Appellant that the entire sum received by the Appellant for purchase of land could not form the basis for computation of the service tax, there was no logic in the AA proceeding to raise a demand of service tax in the sum of ₹ 10,45,61,837 calculated on the gross value of ₹ 112,96,77,891. Interest and penalty were also calculated on that basis. The impugned order requiring the Appellant to deposit 25% of the said sum was unreasonable particularly considering that Section 35 F (ii) of the Act as amended with effect from 6th August 2014 required a maximum pre-deposit of 7.5% of disputed tax. 9. Without prejudice to the above submissions, Mr. Sabharwal submitted that even a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant that the entire sum received by the Appellant for purchase of land could not form the basis for computation of the service tax. Yet when the AA's order dated 30th September 2013 is examined carefully it shows that the AA has computed the service tax demand as ₹ 10,45,61,837 [service tax ₹ 10,25,11,605/- plus Education Cess of ₹ 20,50,232/-] calculated @ 10% on the gross value of ₹ 112,96,77,891 and taxable value of ₹ 110,51,16,053. This prima facie appears unsustainable since the total sum shown to have been received by the Appellant under the three MOUs, even as per the SCN, is around ₹ 100.68 crores [14+12.33+74.05]. It further appears that the interest and penalty have also been calculated on that basis. 13. It further prima facie appears that the AA overlooked the fact that even as per the SCN no land in Kurukshetra was purchased although the Appellant received money for that purpose. The Appellant's explanation that it returned the said sum to SICCL in the form of shares in 13 of its group companies does not appear to have been considered. A further question that would arise is whether the entire profit generated fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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