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Profit and Loss Accounts can’t be relied for Determination of Service Tax Liability

The Madras High Court in Firm Foundations & Housing Pvt. Ltd. vs. Principal Commissioner of Service Tax, held that profit and Loss Accounts cannot be relied upon for determination of the point of rendition and accrual of services for the purpose of imposition of service tax. The Petitioner, Firm Foundations & Housing Pvt. Ltd is engaged in promotion and construction of residential apartments and complexes. 

The projects are undertaken on a joint venture basis. The petitioner builds on the property of other landowners. A Show Cause Notice (SCN) was served to the petitioner to explain why differential service tax should not be demanded from the petitioner in terms of Section 73(1) of the Finance Act, 1994.

Article referred: http://www.taxscan.in/profit-loss-accounts-determination-service-tax-liability-madras-hc/20891/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29

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