9911796707
TMI Blog2025 (2) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... of Finance Act, 1994 merely from such discrepancy. At this stage, it is not required to examine the applicability of these two decisions as the adjudicating authority has correctly pointed out that no steps were taken by appellant to rectify the statutory filings, which, according to their submissions in response to the show cause notice, was genesis of the dispute. While neither adjudicating authority nor the Tribunal is concerned with the correctness of the records filed before other tax authorities, the inferences that may be drawn from the two records, neither of which were defended except by furnishing of details of sale of goods either independently or along with the services that is beyond the purview of Finance Act, 1994, is the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, for the purpose of their operational expediency, is trifurcated into three divisions, viz., 'product division' for sale of goods, 'service division' for installation and maintenance contracts and 'project division' for execution of turnkey projects. On the basis of 'third party data', a generic description for information supplied/gathered from other agencies of government, which, in this case, was the income tax authority concerned, it was determined that, for financial year 2015-16, turnover of services, reported as ₹ 9,34,31,708, appeared to be erroneous inasmuch as the return to the other authority indicated turnover of ₹ 41,93,95,586/-. Repeated enquiries between January 2020 and December 2020 emanating from the jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods, either sold as it was or that included in value in the course of rendering service on which tax liability had been discharged on the service component, had been duly furnished as also discharge of tax liability under VAT regime of the respective state governments along with the reconciliation for exclusion of value of goods / components to the extent ₹ 38,17,59,208 (comprising 4,57,14,791 by 'product division', ₹ 6,33,265 by the 'service division' and ₹ 3,35,41,152 by the 'project division') but that the adjudicating authority remained unconvinced. He, therefore, submitted that the disposal of show cause notice was erroneous and, thereby, not consistent with the law as set out by the Tribunal in GD Goenka Pvt Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence between the turnover of services in the statutory filings before the two tax authorities and that they appeared to have taken the investigations seriously only after issue of show cause notice. It is also clear from the records that the reconciliation of the two statutory records had been furnished despite which the adjudicating authority preferred to give credence to the filing which appeared to favour recovery of indirect tax without examining the records. This is apparent from '14. It is seen that the noticee have declared total Operational Service Income of Rs.41,93,95,586/- in their ITR, whereas they have declared gross income of Rs. 9,32,96,708/- in their ST3 returns for FY 7015-16, thus it is seen that there is a difference of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the correct. 16. In view of the above, I find that the notciee have themselves declared service income amounting to Rs. 41,93,95,586/- in their statutory records, whereas they have only declared service income of Rs. 9,32,96,708/- in their ST3 returns for FY 2015-16, giving rise to difference of Rs. 32,60,98,878/-. I find that the noticee have failed to substantiate the difference of Rs. 32,60,98,878/- arising between the declared turnover of Rs.41,93,95,586/- in their Income Tax Return (ITR) and the income of Rs. 9,32,96,708/- declared in their Service Tax return for the Financial year 2015-16. 17. Thus, I find that the noticee have failed to declare the differential income of Rs.32,60,98,878/- arising from rendering taxable servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one or the other on the other hand. Empowerment to invoke section 73 of Finance Act, 1994 extends from the obligation in section 70, read with section 68, of Finance Act, 1994 and not much different from the scope of normal assessment under section 72 of Finance Act, 1994 which enables obtaining of additional documents and evidence for re-determination of sum payable by an assessee. Necessarily, the proceedings in section 73 of Finance Act, 1994 invokes similar scrutiny before issue of show cause notice. It is only upon lack of response by person liable to tax that an adverse inference may, at best, be drawn. It was incumbent upon the adjudicating authority to examine the details of the goods said to have been supplied either by way of sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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