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2013 (7) TMI 196 - ALLAHABAD HIGH COURTTax Collection at Source (TCS) u/s 206-C of the Income Tax Act, 1961 - Liquor trade - CL-2A licenses - The contention of the petitioners is that the petitioners have obtained the licenses under the U.P. Excise Act, 1910 and the Maximum Retail Price has been fixed by the Excise Commissioner in exercise of powers conferred on him under Section 41 (e) (iii) of the U.P. Excise Act, 1910. Therefore, the provision of collecting tax shall not apply. - it is further contended that since the petitioners did not get a right to carry-on trade on the basis of auction and more particularly sale price has been fixed by the Excise Commissioner, no tax can be collected at source by the opposite parties, which is clearly in violation of Sub-Clause (iii) of Clause (a) of the Explanation to Section 206-C of the Income Tax Act, 1961. Held that:- Apex Court in Union of India and others versus Om Prakash S.S. & others [2001 (2) TMI 6 - SUPREME Court], has observed that, "The reliance placed on the explanation to Sub-Section (ii) of Section 206-C is misplaced - 'Buyer' would mean where a person by virtue of the payment gets a right to receive specific goods and not where he is merely allowed/permitted to carry on business in that trade. It is for this reason that we had earlier dismissed the Special Leave Petitions and any observations of the High Court not in consonance with this may be not strictly correct but the fact remains that on licences issued by the Government permitting the licensee to carry-on liquor trade the provisions of Section 206-C are not attracted as the licensee does not fall within the concept of 'buyer' referred to in that Section. Buyer has to be buyer of goods and not merely a person who acquires a licence to carry on the business." In the instant case, Maximum Retail Price was fixed by the Excise Commissioner in exercise of powers conferred on him under Section 41 (e) (iii) of the U.P. Excise Act, 1910, petitioners are excluded from the provisions of Section 206-C in view of the Explanation (a) (iii) as petitioners cannot be termed as 'buyer'. - In favor of Petitioner.
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