TMI Blog2015 (11) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 above, assessee is engaged in ship breaking activity and as given to understand these items/ products in question are finished products obtained from the activity. They constitute sizable chunk of production done by ship breakers. Though such products may be commercially known as "scrap" they are definitely not "waste and scrap". The items in question are "usable as such" and therefore does not fall within the definition of scrap as given in of section 206C(1). Having said so, we restore the issue to Assessing Officer with direction to grant relief to assessee under the provision of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer, assessee was under obligation to collect from buyer of scrap, a sum at 1% as income tax + SC + EC. Section 206C(7). Further provides that if the seller does not collect tax or after collecting the tax fails to pay it, he shall be liable to pay simple interest at 1% from the date on which such tax was collectible to the date on which the tax is actually paid off. For non compliance of provisions of Section 206C of the Act r.w. Rule 37C of the Income Tax Rules, 1961, assessee was liable to pay tax and interest thereon. A show cause notice was issued on 16.09.2010 which was returned by Postal Authority with remarks LEFT . Accordingly, demand u/s. 201(1) and interest thereon of ₹ 40,16,418/- and ₹ 23,29,522/- respectively, tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A) of the Act. The provision of Section 201 of the Act reads as under: 201. of income-tax Act: Consequences of failure to deduct or pay. (1) Where any person, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act, or (b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax: Provided that no penalty shall be charged under section 221 from such person, u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Navine Fluorine International Ltd Vs. ACIT, TDS Circle Surat, for A Y 2009-10 2010-11, inter alia held that term waste and scrap are one item. The waste and Scrap must be from manufacture or mechanical working of 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 above, assessee is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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