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2016 (3) TMI 281 - AT - Income TaxTCS demands - tax liability of the buyer of the scrap - Held that:- TDS demands raised under section 201, TCS demands raised under section 206C are in the nature of vicarious liabilities which survive only as long as principal liability of the taxpayer remains in existence. When the principal tax liability itself is extinguished, the very reason of the demand raised under section 206C ceases to hold good in law. The details furnished by the assessee before the Assessing Officer and the verifications by the Assessing Officer are intended to ensure that the buyer of the goods has duly discharged his tax liability in respect of the income earned in respect of goods in question. Once that satisfaction is arrived at, there cannot be any justification of recovering the tax collectible at source which is, in any event, adjustable against the tax liability of the buyer of the scrap. The relief granted by the Assessing Officer is in accordance with the law laid down by the binding judicial precedents. In view of these discussions the CIT(A), in the second round, was indeed justified in granting the impugned relief. As for the appeals filed by the assessee against the order passed by the CIT(A) in the first round, these appeals are now infructuous as the relief is granted to the assessee by the AO while giving effect to the directions of the CIT(A) in the second round which now stands confirmed and approved by us.
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