TMI Blog2014 (8) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... cover consideration for services provided. Even assuming that such recoverable cost proposed to be recovered from the subsidiary are for the services rendered, if such amount is not realized and recovered and no book adjustment is carried out, liability for service tax would not arise. Other than a ‘Note’ showing proposal to recover the cost from the subsidiary, there is no corresponding evidence either documentary or otherwise to show that there was either a book adjustment or recovery of cost. There is no evidence to show that the appellants have recovered cost for the services rendered from the subsidiary or the public limited company which has been formed subsequently either documentary or otherwise. When the cost of services is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause of difference between balance sheet and the ST3 returns. The learned consultant on behalf of the appellants submitted that in this case, the balance sheet was prepared following the accrual method whereas the ST3 returns are filed and taxes are paid after receipt of consideration. He produces complete worksheet which according to him would show that the appellants have paid service tax on the entire differential amount as and when the same was received from their customers. The learned DR would submit that this is required to be verified by the original adjudicating authority and therefore the matter may be remanded so that this can be verified for its correctness and if necessary, demand can be requantified. The learned consultant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in kind as the same will be recovered from the new subsidiary when formed. The learned consultant submits that the new subsidiary was formed only on 30.3.2011 and is yet to take over the functions which it was supposed to take over. Till now, the appellants are themselves performing these functions in Delhi Airport. He submits that on the date of balance sheet i.e., as on 31.3.2010 no subsidiary had been formed and appellant had not earned any income chargeable to service tax. In the subsequent financial year 2010-2011, the subsidiary was formed and converted into a public limited company. However the amount which was proposed to be recovered from the subsidiary or the public limited company was not recovered and he draws our attenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost from the subsidiary, there is no corresponding evidence either documentary or otherwise to show that there was either a book adjustment or recovery of cost. Having accepted the Note in the annual report that expenses already incurred and booked by the appellants in their accounts will be recovered in future date as correct, the subsequent assertion of the assessee that they decided not to recover cannot be rejected outright without any evidence to the contrary. In our opinion, there is no evidence to show that the appellants have recovered cost for the services rendered from the subsidiary or the public limited company which has been formed subsequently either documentary or otherwise. When the cost of services is not recovered ques ..... X X X X Extracts X X X X X X X X Extracts X X X X
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