Cadogan Energy Solutions Share Discussion Threads

[shortcpx] 18/3/2021 14:52

Seen one tweet pop up. Slowly being discovered.

[diesel] 18/3/2021 14:14

Well the recent movement will be noticed and if/when they get the cash back this way undervalued.

[targatarga] 18/3/2021 13:22

Perhaps these are about to pop!

[shortcpx] 17/3/2021 09:34

Yes, charts aren't most helpful for illiquid stocks but volumes speak volumes

[fillipe] 17/3/2021 09:24

Lowest ASK currently on show is 4.5p.

f

[diesel] 17/3/2021 09:20

The charts in a company like this are meaningless, but many new to the business might well get excited by the above chart, and one year high.

[shortcpx] 17/3/2021 08:33

Either a leak or anticipating news...

[thordon] 17/3/2021 08:21

From hardly no trades couple months ago , seems to be getting noticed now

[targatarga] 17/3/2021 08:12

Noticed how the buys are coming in nice 100,000 blocks. We had one yesterday and a 50,000 on Monday. Nice

[thordon] 16/3/2021 23:03

the tax refund from the courts is due as well from the High court case won from last week.
We also had 7 Billion Cubic feet of stored gas bought in the market last year in there trading account not sold awaiting information.
Another high court case on a well stopped last year should be resolved in next 2 months
Refund of $15 million from Proger SRL ?
would post but have to convert from Ukraine to English and take multiple messages.
The point is collectively we are looking at a price of 20p , the problem is Cadogan do not release this information but on Ukraine's company's RNS.

[shortcpx] 16/3/2021 12:04

On the flip side, when the traders find this, they'll proclaim the "tiny float" which means this flies when the collective beer money traders pile in.

[diesel] 16/3/2021 11:47

I cannot believe that the major shareholders do not know what is going on, take a look at the register! I have a small amount invested here as the cash holdings even without the Proger money, hardly makes up the M/Cap. However, I am uncomfortable about the ownership, anyway will stay just to see how the Proger fiasco plays out.

[russman] 16/3/2021 08:47

CAD Communication should be more transparent.
Proger loan "repayment" should be all shareholders main priority.

[thordon] 15/3/2021 21:52

Constructive

[shortcpx] 15/3/2021 21:35

Well then we have something in common, except I'm not as verbose about it. Keep copying and pasting endless articles, no one's reading it.

[thordon] 14/3/2021 10:38

If you go back on the chat , you will find the information.

Proger is not the problem

Proger is majority owned by Proger SRL

[researchcentre123] 14/3/2021 08:18

There seem to be 2 issues here.1. Is Proger worth something? I'm not sure if this company has a lot of assets or is "service based" with no value without the pple. If the latter, I suppose it's owners could move contacts etc over to a newco and not pay.2. There's a fundamental issue which is will this management ever pay dividends if they get money or is it all being kept for their salaries, bonuses and perks? If that's the case it wldnt matter if they got a billion pounds in, the shares still wldnt be worth having.Any opinions anyone? I can't find progers balance sheet

[wskill] 13/3/2021 08:31

Much easier to deal with Arabs than Ukraine customs and police force health inspectors at least the Arabs are polite after they have their dash the Ukrainian will always want more from my personal experiences.
It must be very difficult to try and run any business in the country.

[brumbrum79] 13/3/2021 07:05

Shortcpx...
Here, you and all your messages doesn't add nothing.

You don't have any informations and you don't share nothing.
But you think to know everything.

What do you want?

You can write to cadogan's i.r. / ceo.
I'm "sure", you will receive a reply.

[shortcpx] 13/3/2021 03:49

Is anyone actually going to read that text dump? Anyone here know Ukrainian? It adds more value to just provide links and a quick overview of what's going on.

[brumbrum79] 12/3/2021 21:27

26. The courts of first and appellate instances fully established the facts of the case, examined in detail the business transactions of the plaintiff with the above counterparty, for which the Company incurred costs, provided an objective and reasonable analysis of them taking into account the arguments given by the supervisory authority. moreover, there is no reason to believe that the circumstances of the case are not fully or incorrectly established, and therefore the arguments given by the appellant in the cassation appeal do not refute the essentially correct conclusions of the courts of first and appellate instances.

Conclusions on the results of the cassation appeal

27. Taking into account the established circumstances of the case, the panel of judges agrees with the conclusion of the courts of first and appellate instances that the plaintiff has and provided the court with properly executed primary documents, which together indicate the fact of business transactions, but the arguments of the consideration of the case.

28. Having reviewed the judgments in the cassation appeal, verified the completeness of the facts of the case and the correct application of substantive law, the Supreme Court, composed of a panel of judges of the Administrative Court of Cassation, taking into account the law governing the disputed legal relationship, concluded that decisions, courts of first and appellate instances did not allow the incorrect application of substantive law or violations of procedural law, which could be grounds for revocation of court decisions,therefore, the cassation appeal of the Hadiach Joint State Tax Inspectorate of the Main Department of the SFS in Poltava region against the decision of the Poltava District Administrative Court of October 20, 2016 and the decision of the Kharkiv Administrative Court of Appeal of January 31, 2017 should be dismissed.

29. In accordance with paragraph 1 of the first article. 349 of the Code of Administrative Procedure of Ukraine, the court of cassation as a result of the cassation appeal has the right to leave the court decisions of the courts of first and (or) appellate instance without changes, and the appeal without satisfaction.

30. The court of cassation leaves the cassation appeal unsatisfied, and the court decisions - unchanged, if it finds that the courts of first and appellate instances did not allow the incorrect application of substantive law or violations of procedural law in making judgments or procedural actions (part one Article 350 of the Code of Administrative Procedure of Ukraine as amended by the Law in force before the entry into force of the Law of Ukraine of 15.01.2020 № 460-IX ).

Pursuant to Articles 341 , 343 , 349 , 350 , 355 , 356 , 359 of the Code of Administrative Procedure of Ukraine , the Court,

HAS DECIDED AS FOLLOWS:

Dismiss the cassation appeal of the Hadiach Joint State Tax Inspectorate of the Main Department of the State Tax Service in Poltava Oblast.

Leave the decision of the Poltava District Administrative Court of October 20, 2016 and the decision of the Kharkiv Administrative Court of Appeal of January 31, 2017 in case № 816/2062/13-a unchanged.

The decision comes into force from the date of its adoption, is final and cannot be appealed.

Judges I.Ya. Olender I.A. Goncharova RF Хан;овk2;

[brumbrum79] 12/3/2021 21:27

17. In resolving disputes regarding the legality of the formation of taxpayers of their tax accounting data, it is necessary to take into account that in accordance with the requirements of Art. 71 of the Code of Administrative Procedure of Ukraine, the obligation to prove the relevant circumstances in disputes between a person and a subject of power rests with the subject of power.

However, if the controlling body provides evidence that the documents on the basis of which the taxpayer declared his tax liabilities contain information that is not true, the taxpayer must refute these arguments. The above follows from the content of the first part of Article 71 of the Code of Administrative Procedure of Ukraine , according to which each party must prove the circumstances on which its claims and objections are based.

18. Thus, to confirm the actual implementation of business transactions, taking into account the specifics of such transactions and agreements governing them, the Company must have the appropriate properly executed primary documents, which together must indicate the indisputable fact of actual business transactions, which is the basis for taxpayer.

Assessment of the arguments of the participants in the case and the conclusions of the courts of first and appellate instance

19. The court of cassation review the judgments and arguments within the requirements of the appeal and on the basis of established facts of the case validates the application by trial or appellate court of substantive and procedural law (part one of Article 341 of the Code of Administrative Procedure of Ukraine of the Law in force before the entry into force of the Law of Ukraine of 15.01.2020 № 460-IX ).

20. The arguments of the cassation appeal do not contain other substantiations than those stated (given) in the act of inspection, objection to the statement of claim, appeal and taking into account which the courts of first and appellate instances have already assessed the established circumstances of the case.

During the consideration of the case by the courts of previous instances, due consideration was given to the evidence in their entirety in compliance with Articles 70-72 , 86 of the Code of Administrative Procedure of Ukraine and other circumstances refuting the position of the supervisory authority for profit. Thus, the court examined the primary documents, which in accordance with paragraph 44.1 of Art. 44 of the Tax Code of Ukraine , are the basis for tax accounting and which contain information that fully reflects the essence of business transactions and confirms their actual implementation.

21. The courts established the actual implementation of business transactions between the plaintiff and his counterparty LLC "DDZ-Resource", namely in favor of the plaintiff work on the development, testing and exploration of well № 3 Zagoryanskogo field, which were due to the contract № 6-11-09 AE from 02.12.2009, which is confirmed by properly executed primary documents, the obligation to maintain and store which is provided by the rules of tax accounting. These documents contain sufficient data on the content of business transactions and their participants, confirming their actual implementation.

22. Reference of the controlling body, as on the basis of unreality of business operations of the plaintiff with LLC "DDZ-Resource", to the information set forth in the inspection report dated 07.07.2012 № 1817 / 22-5 / 34825525 on the results of unscheduled on-site inspection of LLC "DDZ-Resource", which established the lack of resources for business activities and did not confirm the actual supply of goods, works or services (established unreality of business transactions) from subcontractors LLC "Eco-Prom-Group", PE " Mirsan Service ”, LLC“ Budmashpost ”, LLC“ Emson ”, LLC“ Biofa ”, PE“ Wells ”, the courts of previous instances reasonably did not take into account, given that these conclusions, which are set out in the act of 07.07.2012 № 1817 / 22-5 / 34825525 made on the basis of on-site unscheduled inspections, information provided by other regulatory authorities, in particular compiled due to the impossibility of cross-checks, information contained in the SFS databases.

The panel of judges notes that the tax information provided by other supervisory body, including the reasons for the impossibility of cross-checking, as well as any tax information available in the information - analytical databases on counterparties, is informative. The references of the controlling body to such information, as well as to the conclusions of off-site inspections, as a criterion for assessing the reality of business transactions, are unfounded because, in fact, any primary documents of the taxpayer are not used and analyzed, and therefore such information does not meet the criterion of legal significance. and are not admissible and reliable evidence within the meaning of the Procedural Law.

In addition, such information, which is not supported by appropriate, admissible and reliable evidence, does not in itself prove the existence of tax offenses referred to by the supervisory authority.

23. Also, contrary to the requirements of the Code of Administrative Procedure of Ukraine (as amended by the courts), the supervisory body did not prove and provide adequate evidence that the contractor (contractors in the supply chain) had manpower and logistics insufficient to carry out the relevant type of economic activity stipulated by the contract with the plaintiff, as no evidence was provided and evidence of the facts established by the courts, but not taken into account in making decisions, and would indicate illegal conduct of the counterparty such and coherence between them.

The controlling body did not deny or question the right of DDZ-Resource LLC to involve subcontractors in the performance of works (services) provided for in the contract with the plaintiff.

24. References of the controlling body, in particular in the cassation appeal, to the court decisions in the case № 2a-1670/5107/12, which recognized the lawful tax notices - decisions made in relation to the counterparty LLC "DDZ-Resource" on the basis of the act of 07.07. 2012 № 1817 / 22-5 / 34825525, which in the opinion of the defendant confirms the non-commodity operations of LLC "DDZ-Resource" with subcontractors, in connection with which the courts violated the requirements of Art. 72 of the Code of Administrative Procedure of Ukraine, are unfounded, because, as can be seen from the court decisions in the case № 2a-1670/5107/12, such established the absence of actual commission in favor of LLC "DDZ-Resource" operations to provide legal services PE "Mirsan Service", provided by the contract of 26 October 2010 №1026 / 3, under which the latter undertook to ensure the signing of LLC "Astroinvest-Energy" acts of work performed and payment for such work performed by LLC "DDZ-Resource" at well на3 Zagornyansky GKR in accordance with terms of the contract dated December 2, 2009 №6-11-09А;Е.

The courts in the case № 2a-1670/5107/12 did not investigate and did not assess the circumstances of the plaintiff's business relationship with LLC "DDZ-Resource", as well as LLC "DDZ-Resource" with contractors LLC "Eco-Prom-Group", LLC " Budmashpost ”, LLC“ Emson ”, LLC“ Biofa ”, PE“ Wells ”, and hence the application of Art. 72 of the Code of Administrative Procedure of Ukraine in this case is impossible.

25. The courts also found that there was an economic effect from the business transaction, namely that as a result of the work performed by DDZ-Resource LLC under the contract, Astroinvest-Energy LLC received income from the sale of natural gas and condensate extracted from the well №3 Zagoryanskoho field in the amount of UAH 135542064.00, including VAT - UAH 22690344.00, and the plaintiff's net profit amounted to UAH 4019232.12, in this regard, the panel of judges agrees with the conclusion of the court of first instance on the proper confirmation of the economic content and economic purpose.

In addition, as correctly indicated by the courts at the time of signing the contract, the plaintiff in the absence of the results of work under the contract inflow of hydrocarbons would not incur any costs, and when receiving hydrocarbons as a result of work - received additional income from the well. contract for a long time there was no extraction of hydrocarbons and on which the plaintiff did not see ways for its further development. So, this was the economic content and economic purpose of Astroinvest-Energy LLC when concluding the contract with DDZ-Resource LLC.

[brumbrum79] 12/3/2021 21:26

ARGUMENTS OF THE PARTIES IN THE CASE

8. In the arguments of the cassation appeal the defendant notes the violations, which in his opinion committed by the plaintiff, and the conclusions specified in the inspection report, indicates that the courts did not take into account the arguments of the supervisory body regarding the lack of actual business transactions "DDZ-Resource" circumstances regarding the lack of reality of business transactions in the supply chain, the lack of LLC "DDZ-Resource" labor and material resources, the submitted acts of delivery - acceptance of works do not contain specific - certain content and scope of business transactions, no economic content and economic goals in concluding a contract with DDZ-Resource LLC.

In the cassation appeal, the supervisory body actually requests a reassessment of the established circumstances of the case.

9. The company filed an objection to the cassation appeal, in which the plaintiff points to the correctness of the conclusions of the courts of first and appellate instances on the groundlessness of the allegations of the supervisory authority on the plaintiff's violation of tax law and asks to leave the cassation appeal unsatisfied.

SOURCES OF RIGHTS AND ACTS OF THEIR APPLICATION

10. Tax Code of Ukraine (as amended at the time of the dispute):

10.1. Article 44, paragraph 44.1.

For tax purposes, taxpayers are required to keep records of income, expenses and other indicators related to the definition of objects of taxation and / or tax liabilities, on the basis of primary documents, accounting records, financial statements, other documents, related to the calculation and payment of taxes and fees, the conduct of which is provided by law.

Taxpayers are prohibited from forming indicators of tax reporting, customs declarations on the basis of data not confirmed by the documents specified in the first paragraph of this paragraph.

10.2. Subparagraph 134.1.1 of paragraph 134.1 of Article 134.

The object of income tax is income with a source of origin from Ukraine and abroad, which is determined by reducing the amount of income for the reporting period, determined in accordance with Articles 135-137 of this Code , the cost of goods sold, work performed, services rendered and the amount other expenses of the reporting tax period, determined in accordance with Articles 138-143 of this Code , taking into account the rules established by Article 152 of this Code .

10.3. Article 138, paragraph 138.2.

Expenses that are taken into account to determine the object of taxation are recognized on the basis of primary documents confirming the taxpayer's expenses, the obligation to maintain and store which is provided by accounting rules, and other documents established by Section II of this Code .

10.4. Subparagraph 139.1.9 of paragraph 139 of Article 139.

Not included in the costs: costs not confirmed by the relevant settlement, payment and other primary documents, the obligation to maintain and store which is provided by the rules of accounting and tax assessment.

11. Law of Ukraine "On taxation of corporate profits" (as amended at the time of the dispute):

11.1. Article 1, paragraph 1.32.

Economic activity - any activity of a person aimed at obtaining income in monetary, tangible or intangible forms, if the direct participation of such a person in the organization of such activities is regular, permanent and significant.

11.2. Article 5.1, paragraph 5.1.

Gross costs of production and circulation (hereinafter - gross costs) - the amount of any costs of the taxpayer in cash, tangible or intangible forms, carried out as compensation for the value of goods (works, services) purchased (manufactured) by such taxpayer for their further use in their own business.

11.3. Subparagraph 5.2.1 of paragraph 5.2 of Article 5.

Gross costs include: the amount of any costs paid (accrued) during the reporting period in connection with the preparation, organization, production, sale of products (works, services) and labor protection, including the cost of purchasing electricity (including jet), subject to the restrictions set out in paragraphs 5.3 - 5.7 of this article.

11.4. Subparagraph 5.3.9 of paragraph 5.3 of Article 5.

Gross costs do not include any costs not confirmed by the relevant settlement, payment and other documents, the obligation to maintain and store which is provided by the rules of tax accounting.

11.5. Subparagraph 11.2.1 of paragraph 11.2 of Article 11.

The date of increase in gross production costs (circulation) is the date that falls on the tax period during which any of the events that occurred earlier: or the date of debiting funds from the bank accounts of the taxpayer to pay for goods (works, services), and in in case of their purchase for cash - the day of their issuance from the taxpayer's cash desk; or the date of posting by the taxpayer of goods, and for works (services) - the date of actual receipt by the taxpayer of the results of works (services).

12. Law of Ukraine "On Accounting and Financial Reporting in Ukraine" :

12.1. Article 1.

12.1.1. Business transaction - an action or event that causes changes in the structure of assets and liabilities, equity of the enterprise.

12.1.2. Primary document - a document that contains information about a business transaction and confirms its implementation.

12.2. Part 1 of Article 9.

The basis for accounting of business transactions are the primary documents that record the facts of business transactions. Primary documents must be drawn up during the transaction, and if this is not possible - immediately after its completion. Consolidated accounting documents may be compiled on the basis of primary documents to control and streamline data processing.

12.3. Part 2 of Article 9.

Primary and consolidated accounting documents can be made on paper or machine media and must have the following mandatory details: the name of the document (form); date and place of compilation; the name of the enterprise on whose behalf the document was drawn up; the content and scope of the business transaction, the unit of measurement of the business transaction; positions of persons responsible for the implementation of the business transaction and the correctness of its design; personal signature or other data that allows to identify the person who participated in the transaction.

POSITION OF THE SUPREME COURT

13. Legal consequences in the form of the taxpayer's right to incur costs occur only in the case of actual (actual) business transactions for the purchase of goods (works, services) for their use in their business activities related to the movement of assets, change obligations or equity of the taxpayer, and correspond to the economic content reflected in the agreements concluded by the taxpayer, which must be confirmed by properly executed primary documents.

14. In resolving tax disputes, the Court takes into account the presumption of good faith of the taxpayer which provides for the economic justification of the taxpayer's actions resulting in tax benefits and reliability in the taxpayer's accounting and tax reporting.

According to the doctrine of the reality of a business transaction, which is used in the case law of the Supreme Court, the consequence for tax accounting is created only by the actual movement of assets.

The norms of the Tax Code of Ukraine summarize the requirement for real changes in the property status of the taxpayer, as a mandatory feature of a business transaction.

Analysis of the reality of economic activity should be carried out on the basis of tax and accounting data of the taxpayer and their compliance with the actual economic content.

In this case, the primary documents, which are the basis for accounting, record data only on the actual business transactions. Documents have the force of primary documents only in the case of the actual implementation of a business transaction. If the actual implementation of the business transaction is absent, the relevant documents can not be considered primary documents for the purposes of tax accounting, even in the presence of all the formal details of such documents required by law.

However, the mere presence or absence of individual documents, as well as errors in their design is not grounds for concluding the absence of a business transaction, if other data show that the actual movement of assets or change in equity or liabilities of the taxpayer in in connection with his economic activity took place (took place).

At the same time, the presence of formally drafted but unreliable primary documents, the compliance of which with the actual circumstances is refuted by appropriate, admissible and reliable evidence, is not an unconditional confirmation of the reality of the business transaction.

Thus, the consequences for tax accounting are created only by the actual movement of assets, which is a prerequisite for the formation of the object of income tax, and such movement must be confirmed by primary documents.

15. The norms of the tax legislation do not make the reliability of the taxpayer's tax accounting data dependent on the observance of tax discipline by his counterparties, if this taxpayer (buyer) had real expenses in connection with the purchase of goods (works, services) intended for use in his business. activities. Violation by a certain supplier of goods (works, services) in the supply chain of tax legislation or business rules may not be grounds for a conclusion of violation by the buyer of goods (works, services) of the legislation on the formation of the object of income tax, and therefore the payer taxes (the buyer of goods (works, services)) should not suffer negative consequences, in particular in the form of deprivation of the right to incur costs,

16. It should be noted that the Supreme Court has repeatedly (in particular, in the decisions of 18.02.2020 in the case №803 / 861/15-a, 24.09.2020 in the case № 804/2701/17, from 19.04.2019 in the case №803 / 236/15-a) stated that the purpose of income as a qualifying feature of economic activity corresponds to the requirement of a reasonable economic reason (business purpose) in the course of economic activity. A reasonable economic reason must be present in every business transaction. Only in this case, this or that transaction can be considered committed within the economic activity of the taxpayer and only under such conditions the taxpayer has the right to take into account in tax accounting the consequences of the relevant business transactions.

Finding out the intention of the taxpayer to obtain the economic effect of the business transaction involves an analysis of the conditions and circumstances of its implementation. Thus it is necessary to proceed from what in this or that situation there should be a behavior of the conscientious business entity that under usual conditions of conducting economic activity is interested in the greatest reduction of the expenses.

[brumbrum79] 12/3/2021 21:24

Case category № 816/2062/13-a: Administrative cases (since 01.01.2019); Cases concerning administration of taxes, fees, payments, and also control over observance of requirements of the tax legislation, in particular concerning; administration of certain taxes, fees, charges, of them; corporate income tax.
Sent by the court: 19.02.2021. Registered: 21.02.2021. Published: 22.02.2021.
Date of entry into force: 19.02.2021
Case number: K / 9901/36275/18
State Emblem of Ukraine
DECREE

IN THE NAME OF UKRAINE

February 19, 2021

m. Kyiv

case № 816/2062/13-a

administrative proceedings № К / 9901/36275/18

The Supreme Court, composed of a panel of judges of the Administrative Court of Cassation:

Judge-Rapporteur Olender I.Ya.,

Judges: Goncharova IA, Khanova RF,

considered in a preliminary hearing the cassation appeal of the Hadiach Joint State Tax Inspectorate of the Main Department of the SFS in Poltava region against the decision of the Poltava District Administrative Court of October 20, 2016 (Judge Kanygina TS) and the decision of the Kharkiv Administrative Court of Appeal of January 31, 2017 (judges: Melnikova LV (presiding), Benedyk AP, Makarenko YM) in the case №816 / 2062/13-a on the claim of the Limited Liability Company "Astroinvest-Energy" to Gadyatska United State Tax Inspectorate of the Main Department of the SFS in Poltava region on the recognition of illegal and cancellation of the tax notice-decision,

FOUND:

HISTORY OF THE CASE

Summary of claims

1. Astroinvest-Energy Limited Liability Company (hereinafter - the plaintiff, the Company) filed a lawsuit with the Hadiach Joint State Tax Inspectorate of the Main Department of the SFS in Poltava region (hereinafter - the defendant, the supervisory authority) to declare illegal and cancel tax notice - decision of 21.12.2012 №0000422301.

2. The claims are substantiated by the fact that the conclusions of the supervisory body on the Company's violation of tax legislation are unfounded and based solely on assumptions, instead the plaintiff has all the primary documents confirming business transactions with the counterparty and indicate no violations of tax law by plaintiff.

Summary of decisions of courts of first and appellate instances

3. The case has been considered by the courts repeatedly.

The decision of the Poltava District Administrative Court of July 31, 2013, upheld by the decision of the Kharkiv Administrative Court of Appeal of November 11, 2013, denied the claim.

By the decision of the Supreme Administrative Court of Ukraine of May 16, 2016, the decision of the Poltava District Administrative Court of July 31, 2013 and the decision of the Kharkiv Administrative Court of Appeal of November 11, 2013 were canceled, the case was remanded to the court of first instance

4. By the decision of the Poltava District Administrative Court of October 20, 2016, upheld by the decision of the Kharkiv Administrative Court of Appeal of January 31, 2017, the Company's claim was satisfied, the appealed tax notice - the decision was declared illegal and revoked.

The court's decision is based on the fact that the plaintiff was entitled to incur costs for business transactions with the counterparty given the reality of business transactions, while the conclusions of the supervisory authority are based solely on assumptions and not supported by appropriate evidence.

Summary of the requirements of the cassation appeal

5. Disagreeing with the decisions of the courts of first and appellate instances, the supervisory body filed a cassation appeal, where referring to violations of substantive and procedural law, requests to cancel the decision of the Poltava District Administrative Court of October 20, 2016, the decision of the Kharkiv Administrative Court of Appeal of January 31 2017 and make a new decision to refuse to satisfy the claims of the Company.

6. The cassation hearing of the case was conducted in a preliminary hearing in accordance with Art. 343 of the Code of Administrative Procedure of Ukraine .

SUMMARY OF THE CIRCUMSTANCES OF THE CASE ESTABLISHED BY THE COURTS OF FIRST AND APPEALS

7. The courts of previous instances found that the actual basis for reducing the amount of negative value of the object of income tax were the conclusions of the supervisory authority set out in the act of inspection dated 03.12.2012 № 555 / 22-35193237, issued as a result of unscheduled on-site documentary inspections of Astroinvest-Energy LLC on compliance with tax, currency and other legislation for the period from 01.07.2010 to 30.09.2012 on the relationship with DDZ-Resource LLC, during which the plaintiff found a violation of the requirements of paragraph 5.1, paragraphs . 5.2.1 item 5.2 of Art. 5 , pp. 11.2.1 item 11.2 of Art. 11 of the Law of Ukraine "On taxation of corporate profits" , paragraph 138.2 of Art. 138 , para. 139.1.9 p. 139.1 art. 139 of the Tax Code of Ukraine , resulting in a reduction of the amount of negative value of the object of income tax in the period under review, the total amount of UAH 4786829.50 and understated income tax for the 2nd quarter of 2012 in the amount of UAH 546311.00 .

The conclusions of the experts of the supervisory authority on the plaintiff's violation of tax legislation are motivated by the fact that business transactions with LLC "DDZ-Resource" did not cause real legal consequences, given that such transactions, in the opinion of the supervisory authority, did not actually take place and have formal nature in view of the information contained in the act of the STI in Poltava from 07.07.2012 № 1817 / 22-5 / 34825525 on the results of the unscheduled on-site inspection of LLC "DDZ-Resource" on compliance with tax, currency and other legislation for the period from 01.04.2009 to 31.03.2012, in particular, the absence of LLC "DDZ - Resource" production equipment, commercial equipment, as well as vehicles, labor resources. According to the findings of the inspection of LLC "DDZ - Resource" the presence of actual supplies of goods, works or services (unrealistic business transactions) to LLC "DDZ-Resource" from subcontractors LLC "Eco-Prom-Group", PE "Mirsan Service", LLC "Budmashpost", LLC "Emson", LLC "Biofa", PE "Wells", which have a condition different from "0", which led to a legal defect of the primary documents.

On the basis of the act of inspection and the specified conclusions the controlling body accepted the appealed tax notice-decision № 0000422301 by which the amount of negative value of object of the taxation by the income tax in the amount of 4786830,00 UAH is reduced to the plaintiff.

The courts found that the plaintiff leased well № 3 Zagoryanskogo field on the basis of the lease agreement № 0-387 / 07 from 01.11.2007 with additional agreements to it, concluded with SE NJSC "Nadra Ukraine" "Naftogazgeologiya".

Between the plaintiff and LLC "DDZ-Resource" (contractor) concluded a contract № 6-11-09 AE from 02.12.2009 to perform work on the development, testing and exploration of well № 3 Zagoryanskogo field, under the terms of which the plaintiff instructs, and the contractor obliges using the production resources of the contractor and production resources of the company, using the work of the contractor's staff, in the manner and under the conditions specified in this contract to perform work on completion of well construction, namely development and testing of well №3 Zagoryanskoye field, in order to obtain hydrocarbon products , and in the case of receipt of products during the term of this contract to perform work on the study of the well in different modes of operation and experimental-industrial operation of the well. The company undertakes in the manner and on the terms

To confirm the actual execution of the works provided by DDZ-Resource LLC in accordance with the contract, the plaintiff provided: acts of delivery and acceptance of works, tax invoices, invoices, consignment notes, bank statements, certificates of income and expenses, acts of work on pumping workers a solution of a complex corrosion inhibitor and a fluid removal stabilizer; plan of works for re-development, drainage, intensification and research of horizon B-24-25 in well све;р 3 of Zagoryansky GKR, act for research of gas condensate object, plan for template of well ша 3 of Zagoryansky GKR, plan of works on resonance-wave technology ( RHT) № 3 Zagoryansky GKR; well research plan, the results of industrial gas condensate studies of well 3 Zagoryansky GKR technological substantiation of optimal operating conditions JI.3 Zagoryansky NGKR4, substantiation of the need to supply a corrosion inhibitor to well №3 Zagoryansky GKR; certificates of analysis of formation water for iron ions, research results; act of iron ion content, payment orders; report on the complex of performed works on development, testing and research of well № 3 of the Zagoryanskoye field; agreements dated 10.01.2012 № 04/012 between DDZ-Resource LLC and BIOFA LLC on performance of works on application of resonant-wave technology for improvement of qualitative characteristics of the Air Force produced at well № 3 of Zagoryansky GKR, № 1028 P on granting services for maintenance of equipment at the well № 3 Zagoryansky GKR, concluded between PE "Mirsan Service" and LLC "DDZ-Resource"; from 27.07.2011 № 5-07 / 11 on the provision of scientific and technical services, concluded between LLC "DDZ-Resource" and LLC "Budmashpost"; dated 21.06.2011 № 4-06 / 11, dated 05.05.2011 № 5-05 / 11 on the provision of scientific and technical services concluded between DDZ-Resource LLC and Budmashpost LLC, dated 21.01.2011 № 33 / 1 on purchase and sale of chemical reagents, materials and equipment concluded between DDZ-Resource LLC and Eco-prom-Group LLC; from 04.01.2012 № 7-0112 deliveries concluded between BIOFA LLC and DDZ-Resource LLC; from 29.03.2011 № 14 purchase and sale concluded between DDZ-Resource LLC and Wells PE; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments. from 27.07.2011 № 5-07 / 11 on the provision of scientific and technical services concluded between LLC "DDZ-Resource" and LLC "Budmashpost"; dated 21.06.2011 № 4-06 / 11, dated 05.05.2011 № 5-05 / 11 on the provision of scientific and technical services concluded between DDZ-Resource LLC and Budmashpost LLC, dated 21.01.2011 № 33 / 1 on purchase and sale of chemical reagents, materials and equipment concluded between DDZ-Resource LLC and Eco-prom-Group LLC; from 04.01.2012 № 7-0112 deliveries concluded between BIOFA LLC and DDZ-Resource LLC; from 29.03.2011 № 14 purchase and sale concluded between DDZ-Resource LLC and Wells PE; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments. from 27.07.2011 № 5-07 / 11 on the provision of scientific and technical services concluded between LLC "DDZ-Resource" and LLC "Budmashpost"; dated 21.06.2011 № 4-06 / 11, dated 05.05.2011 № 5-05 / 11 on the provision of scientific and technical services concluded between DDZ-Resource LLC and Budmashpost LLC, dated 21.01.2011 № 33 / 1 on purchase and sale of chemical reagents, materials and equipment concluded between DDZ-Resource LLC and Eco-prom-Group LLC; from 04.01.2012 № 7-0112 deliveries concluded between BIOFA LLC and DDZ-Resource LLC; from 29.03.2011 № 14 purchase and sale concluded between DDZ-Resource LLC and PE Wells; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments. concluded between DDZ-Resource LLC and Budmashpost LLC; dated 21.06.2011 № 4-06 / 11, dated 05.05.2011 № 5-05 / 11 on the provision of scientific and technical services concluded between DDZ-Resource LLC and Budmashpost LLC, dated 21.01.2011 № 33 / 1 on purchase and sale of chemical reagents, materials and equipment concluded between DDZ-Resource LLC and Eco-prom-Group LLC; from 04.01.2012 № 7-0112 deliveries concluded between BIOFA LLC and DDZ-Resource LLC; from 29.03.2011 № 14 purchase and sale concluded between DDZ-Resource LLC and Wells PE; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments. concluded between DDZ-Resource LLC and Budmashpost LLC; dated 21.06.2011 № 4-06 / 11, dated 05.05.2011 № 5-05 / 11 on the provision of scientific and technical services concluded between DDZ-Resource LLC and Budmashpost LLC, dated 21.01.2011 № 33 / 1 on purchase and sale of chemical reagents, materials and equipment concluded between DDZ-Resource LLC and Eco-prom-Group LLC; from 04.01.2012 № 7-0112 deliveries concluded between BIOFA LLC and DDZ-Resource LLC; from 29.03.2011 № 14 purchase and sale concluded between DDZ-Resource LLC and PE Wells; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments. concluded between DDZ-Resource LLC and Budmashpost LLC, dated 21.01.2011 № 33/1 on purchase and sale of chemical reagents, materials and equipment, concluded between DDZ-Resource LLC and Eco-prom-Group LLC; from 04.01.2012 № 7-0112 deliveries concluded between BIOFA LLC and DDZ-Resource LLC; from 29.03.2011 № 14 purchase and sale concluded between DDZ-Resource LLC and Wells PE; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments. concluded between DDZ-Resource LLC and Budmashpost LLC, dated 21.01.2011 № 33/1 on purchase and sale of chemical reagents, materials and equipment, concluded between DDZ-Resource LLC and Eco-prom-Group LLC; from 04.01.2012 № 7-0112 deliveries concluded between BIOFA LLC and DDZ-Resource LLC; from 29.03.2011 № 14 purchase and sale concluded between DDZ-Resource LLC and PE Wells; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments. concluded between DDZ-Resource LLC and Wells PE; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments. concluded between DDZ-Resource LLC and Wells PE; from 17.11.2010 №171102 deliveries concluded between Emson LLC and DDZ-Resource LLC, acts of certification of monthly production of hydrocarbons; the results of the comparison of payments of the plaintiff's payments.

Also the fact of performance of works is confirmed: by acts of the performed works and intermediate technical documents: conclusions of SE "PUGR" from 09.03.2010; the act on research of gas-condensate object from 14.04.2010; well scheduling plan № 3 of the Zagoryanskoye field dated 16.09.2010 with the act dated 18.09.2010; the act of 07.10.2010 and the certificate of conformity of the equipment; the plan of works on research of a well № 3 of Zagoryansky GKR from 02.11.2010, the act on research of gas-condensate object from 05.11.2010; technical report "Results of industrial gas condensate surveys of the well № From Zagoryansky GKR with a copy of the license to perform work; plan of works for conducting research on the established modes of the horizon B-18 of the well № 3 Zagoryanskogo field from 14.12.2010, an act for conducting research on the established regimes of the B-18 horizon (2 sheets); substantiation of the need to supply a corrosion inhibitor to the well № 3 of the Zagoryansky field, the forecast of the main technological parameters of the well № 3 from the horizon B-18 of the Zagoryansky field; the results of industrial gas condensate research on well № 3 Zagoryansky NGKR; the plan of gas-hydrodynamic researches of a well №Z Zagoryansky GKR from 18.08.2011, the act on research of gas-condensate object from 12.09.2011; condensate test results; reservoir water analysis certificates; acts of iron ion content; certificates of income and expenses, tax invoices; acts of work performed on the injection of the working solution of a complex corrosion inhibitor and stabilizer of fluid removal.

Regarding the economic content and economic purpose of the disputed business transaction, the courts found that according to the terms of the contract № 6-11-09 AE dated 02.12.2009 the plaintiff is not obliged to pay the Contractor for work under this Contract in the absence of inflow of hydrocarbons (Products). The cost of work to be paid to the Contractor depends on the volume of Products obtained as a result of development and testing of the Well and obtained during the study. In case of absence of the received Production, and also in case payment of works to the contractor according to the given Contract will be less than expenses of the contractor for performance of these works, the contractor releases the company from any responsibility on compensation of the incurred losses (expenses),

The courts found that during the period from October 2008 to February 2009 Astroinvest-Energy LLC carried out a number of works on its own development, testing and research of well № 3 of the Zagoryanskoye field, to confirm which the case file included: work plan for perforation and testing of the T-1 horizon in well №3 of the Zagoryansky GKM dated October 3, 2008; work plan for testing the T-1 horizon in well № 3 of the Zagoryansky GKM dated October 8, 2008; additional plan of works on testing of well №3 of Zagoryansky GKM from 22.10.2008; work plan for additional testing of the T-1 horizon in well № 3 of the Zagoryansky GKM dated 24.10.2008; the plan of works on development of a well № 3 of Zagoryansky GKM from 15.01.2009; work plan for perforation and testing of the T-1 horizon in well №3 of the Zagoryansky GKM dated January 17, 2009; additional work plan for perforation and testing of the T-1 horizon in well №3 of the Zagoryansky GKM; well research plan № 3 of the Zagoryansky GKM dated January 27, 2009; work plan for re-perforation of the T-1 horizon in well № 3 of the Zagoryansky GKM dated 11.02.2009.

From May 2009 to December 2009, no work was carried out on well № 3 of the Zagoryanskoye field, as Astroinvest-Energy LLC did not see any ways to obtain hydrocarbon raw materials from well № 3 of the Zagoryanskoye field.

The courts found that the results of the work performed by DDZ-Resource LLC under the contract of Astroinvest-Energy LLC received income from the sale of natural gas and condensate extracted from well №3 of the Zagoryanskoye field in the amount of UAH 1,355,42064.00, including VAT - 22690344,00 грн;. Taking into account the costs, the profit from the business operation amounted to UAH 4019232.12.