Court upheld position of Main directorate of the STS in Poltava region regarding issued tax notifications-decisions for a total amount of 13.68 million UAH.
The Second Administrative Court of Appeal upheld position of Main directorate of the STS in Poltava region regarding the lack of actual business operations between the LLC “Chlortechvod” and counterparties, as the primary documents are incomplete, orders for services (works) are documented only and not aimed at the actual occurrence of legal consequences due to the concluded agreements.
The Court of Appeal noted that the lack of proof of the actual implementation of business operation (its non-performance) deprives the primary documents of legal significance for the purposes of forming tax benefit, even if they are properly executed by external signs and form.
In addition, the Court rejected the taxpayer’s argumentations on the need to take into account the expert’s opinion, which refutes the audit act. The Court’s position is justified by a fact that the expert’s opinion does not contain a proper assessment of circumstances regarding the purpose and essence of repair and provision of services, which is a key in this case and is formally based solely on documents provided by the taxpayer. Circumstances of the possibility of reflecting disputed amounts of tax reporting and reality of business operations of the LLC “Chlortechvod” are to be established in resolving this dispute by the Court, not the expert, whose conclusion is only one of the possible evidence in this case.
The Second Administrative Court of Appeal made a Decision as of 08.06.2021 in the case № 440/1390/20 to satisfy appeal of Main directorate of the STS in Poltava region and dismiss Decision of the Court of first instance on satisfaction of claims. The Court adopted new Decision which refused to satisfy claims on the recognition of issued tax notices-decisions as illegal and their cancellation.
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