New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (11) TMI 1216 - GUJARAT HIGH COURT

2015 (11) TMI 1216 - GUJARAT HIGH COURT - [2016] 381 ITR 210 - TCS u/s 206C - Not collection of tax at source on Old and used plates, Non-excisable (exempted) like furniture, wood, etc., Trading of scrap (melting) and High seas sale - ITAT held that such products may be commercially known as “scrap” they are not “waste and scrap”, as such items are usable as such, and, therefore, do not fall within the definition of scrap as envisaged in the Explanation to section 206C(1) - Held that:- The Tribu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 206C (1) of the Act with regard to only sale of scrap arising out of manufacturing activity in the course of ship breaking after providing due opportunity of hearing to the assessee. Thus, the Tribunal after recording a finding of fact to the effect that the products obtained by the assessee in the course of ship breaking activity are usable as such, and, therefore, do not fall within the definition of scrap has remitted the matter to the Assessing Officer to grant relief accordingly. Essenti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reinafter referred to as the Act ) at the instance of the revenue, the order dated 14.5.2015 made by the Income Tax Appellate Tribunal, Ahmedabad Bench D (hereinafter referred to as the Tribunal ) in ITA No.2207/Ahd/2011 has been called in question by proposing the following questions, stated to be substantial questions of law:- (A) Whether the Appellate Tribunal has substantially erred in law in interpreting the term Scrap as defined in clause (b) to Explanation to section 206C of the Income Ta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

x Act of ₹ 40,16,418/- and interest charged under section 201(1A) of the Act of ₹ 23,29,522? 2. The Assessing Officer upon verification of the records noticed that during the financial year 2005-06, the assessee had made sales of scrap worth ₹ 35,79,69,613/-; however, no documents/papers leading to collection of tax at source on sale of scrap and payment thereof to the credit of the Central Government Account were produced nor was certification in Form No.27C produced. Accordin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

23,29,522/- under section 201(1A) of the Act. The assessee carried the matter in appeal before the Commissioner (Appeals), who observed that the assessee was engaged in ship breaking activity and the items/products in question were, finished products obtained from the activity and constituted sizeable chunk of production done by the ship breakers. The Commissioner (Appeals) was in agreement with the contention of the assessee that though such products may be commercially known as scrap they were .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ppeal before the Tribunal. The Tribunal in the impugned order has recorded the following findings:- As per assessee, assessee has collected and paid TCS on following type of items of sales during the year. 1. ARTICLES OF IRON & STEEL WIRE ROPES 2. WASTE & SCRAP OF CASTIRON 3. WASTE & SCRAP OF COPPER 4. WASTE & SCRAP OF IRON & STEEL 5. WASTE & SCRAP OF STAINLESS STEEL 6. WASTE & SCRAP, OF NICKET 7. WASTE & SCRAP OF GM, GUM, COP, GER.ALU.PRO Assessee has not collect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

material which is definitely not usable as such because of breakage, cutting up, ware and to other reasons. It would mean that these waste and scrap being one item should arise from manufacture or mechanical working of material. The words waste and scrap should have nexus with manufacturing or mechanical working of materials. Therefore, the word used is which is definitely not usable. The word is as used in this definition of the scrap meant for singular item i.e. waste and scrap . As stated ab .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Assessing Officer with direction to grant relief to assessee under the provision of 206C(1) of Act, with regards to only sale of scrap arising out of manufacturing activity in course of ship breaking after providing due opportunity of hearing to assessee. 3. Mrs. Mauna Bhatt, learned senior standing counsel for the appellant assailed the impugned order by submitting that the interpretation put by the Tribunal as regards the expression scrap is erroneous, inasmuch as, section 206 clearly says scr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

p breaking after providing due opportunity of hearing. It was submitted that the Tribunal in the impugned order has already given a finding that the items in question are usable as such and do not fall within the definition of scrap as given in section 206C (1) of the Act. According to the learned counsel there is no basis for the Tribunal to arrive at such a finding on the material on record. It was, accordingly, submitted that the matter requires consideration and that the appeal deserves to b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ibunal has given a finding that the assessee would be entitled to the relief under the provisions of section 206C (1) of the Act only with regard to sale of scrap arising out of manufacturing activity in the course of ship breaking and, therefore, the Tribunal has rightly interpreted the expression scrap as defined under the Act and that the impugned order being just, legal and proper deserves to be confirmed. 4.1 In support of his submission, the learned counsel placed reliance upon the decisio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ct, did not give rise to a question of law. It was, accordingly, urged that the appeal being devoid of merits, deserves to be dismissed. 5. From the facts as narrated hereinabove, it is apparent that the respondent assessee had collected and paid tax at source (TCS) on the seven items as enumerated in the orders passed by the Commissioner (Appeals) as well as the Tribunal and had not collected tax at source on the following four items :- 1. Old and used plates 2. Non-excisable (exempted) like fu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and, therefore, do not fall within the definition of scrap as envisaged in the Explanation to section 206C(1) of the Act. 7. Section 206C of the Act bears the heading, Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap etc. and provides that every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a chequ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

anufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons. On a plain reading of the said expression, it is evident that any material which is usable as such would not fall within the ambit of the expression scrap as envisaged under clause (b) of the Explanation to section 206C of the Act. 8. The Tribunal, in the impugned order, has recorded that the items/products in question obtained from the activity of ship br .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version