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COMMISSIONER OF INCOME TAX (TDS) Versus SIYARAM METAL UDYOG PVT LTD

2016 (7) TMI 68 - GUJARAT HIGH COURT

Non collection of TCS on sale of scrap - addition made u/s.206C(1) - interest charged u/s.206C(7) - ITAT delted the addition - Held that:- In terms of the explanation clause (aa) any person who purchases the goods in retail sale for personal consumption would not be included within the definition of term 'buyer'. It is therefore, that under sub section (1A) of section 206C, calculation of tax under subsection 1 would not be made, if the buyer furnishes to the person responsible for the tax a dec .....

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to be made. The time limit, of course, would be found in Rule 37C of Income Tax Rules, 1962. The main thrust of subsection 1A of section 206C thus is to make a declaration as prescribed, upon which, the liability to collect tax at source under subsection (1) would not apply. When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere minor delay in filing the said declaration would not defeat the v .....

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9 of 2016. 2. Revenue is in appeal against the judgment of Income Tax Appellate Tribunal raising following question for our consideration. Whether the Appellate Tribunal has substantially erred in law and on facts in deleting the addition made u/s.206C(1) of the Income Tax Act on account of noncollection of TCS on sale of scrap and interest charged u/s.206C(7) in spite of the fact that the assessee was trader of scrap and the provision of section 206(1) was applicable to the assessee? 3. Having .....

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ns of section 206C did not apply at all. Assessing Officer turned down his contention and proceed to make the additions. 4. Eventually, when the issue reached the Tribunal, the Tribunal relying on earlier decision in case of Bharti Metals held that the items in question were scrap. However, in view of the fact that the assessee had admittedly filed a declaration in form 27C collected from the buyers, ruled in favour of the assessee. The Tribunal observed as under: 9. This leads both the parties .....

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igh seas sales is already covered in earlier survey. There is also no dispute about the fact that the assessee has belatedly submitted relevant Form No.27C collected from its buyers. The same were placed on record before the Assessing officer itself who declined to accept the same in view of delay in submission thereof. There is no issue qua genuineness of these Forms. We find that the coordinate Bench decision of Tribunal (supra) already holds that such a belated submission of relevant Form is .....

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pellate findings qua this interest issue as well. Revenue's appeal ITA No.350/RJT/2015 fails. 5. It thus, emerges that admittedly the assessee had submitted form 27C collected from the buyers. There was no dispute about the genuineness of the contents thereof. However, the same was filed somewhat belatedly. It was in this background, the Tribunal found that the additions with the aid of section 206C could not have been made. 6. Section 206C of the Act pertains to profits and gains from the b .....

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rson who obtains in sale by way of auction, tender or any other mode, goods of the nature specified in the table or the right to receive any such goods but does not include a buyer in the retail sale of such goods purchased by him for personal consumption. 7. In the context of this exclusion clause contained in explanation of the term 'buyer', subsection (1A) of section 206C provides as under: (1A) Notwithstanding anything contained in subsection (1), no collection of tax shall be made i .....

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