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2020 (7) TMI 438 - AT - Income TaxTCS u/s 206C(1) - Purchase by the assessee as scarp subjected to TCS - Assessee is dealing in scraped material and has purchased railway scrap in auction - First contention of the assessee is that the material sold by the assessee which was purchased from the railways in the auction does not fall in the definition of scrap as provided in clause (b) of Section 206C - HELD THAT:- Scrap sold by the railway was certainly not usable due to its breakage or wear and tear and it was also subjected to TCS for which the assessee has not raised any objection. Once the assessee has accepted the goods purchased from the railway as scrap and allowed the TCS then the resale of the same goods by the assessee will not part take a different character. In view of the undisputed fact that what was purchased by the assessee is scarp subjected to TCS then the resale of the same material is also be treated as scrap and there is no scope of re-classification of the these goods at the time of sale. No merits or substance in the contention of the assessee. The decisions relied upon by the assessee are on specific facts of those cases and therefore, would not help the case of the assessee. As regards the contention of the assessee that some of the sales considered by the AO as scrap was actually sale of new goods. We note that the AO has considered the sale on the basis of the spot verification. However, now the assessee has also placed certain sale bills in support of his contention that the sales to the extent of ₹ 1,88,60,145/- is sale of new iron goods and not scrap. Since, this is a factual aspect of the matter and needs proper a verification. Therefore, we set aside on this issue to the record of the Assessing Officer for verification of the same by considering the evidence filed by the assessee and then decide the same. Needless to say the assessee be given an appropriate opportunity of hearing before passing the fresh order on this issue. Appeal of the assessee is partly allowed for statistical purposes
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