Good afternoon! I will gladly analyze this court decision for you.
1. The subject of the dispute is the appeal of the tax assessment notice, by which TIR AUTO TRADE LLC had the amount of monetary obligation increased regarding income tax.
2. The court of appeal, with which the Supreme Court agreed, granted the claims of TIR AUTO TRADE LLC, canceling the tax assessment notice, since the tax authority did not prove the fictitious nature of the plaintiff’s business transactions with counterparties. The court noted that the available primary documents (contracts, consignment notes, tax invoices, bank statements) confirm the fact of business transactions. The absence of quality certificates is not a basis for recognizing transactions as fictitious. The impossibility of conducting cross-checks in itself does not indicate a violation. The absence of fixed assets and labor resources in counterparties is also not an unconditional sign of the fictitious nature of transactions, since resources can be attracted under civil law contracts or leases. It is important that the court emphasized the individual responsibility of the taxpayer, that is, TIR AUTO TRADE LLC should not be responsible for the violations of its counterparties. **:** The court also departed from previous conclusions regarding the proof of non-delivery of goods based on the court’s verdict regarding the counterparty, noting that the existence of a verdict regarding the taxpayer’s counterparty, only the fact of initiating criminal proceedings against the counterparty and obtaining during such testimonies of a person regarding non-participation in the creation and activities of the enterprise, only tax information regarding counterparties in the supply chain, only minor errors in the execution of primary documents (separately) – are not independent and sufficient grounds for concluding that business transactions are fictitious.
3. The Supreme Court dismissed the tax authority’s cassation appeal, and the appellate court’s ruling remained unchanged.
