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2016 (1) TMI 1110 - ITAT AHMEDABAD

2016 (1) TMI 1110 - ITAT AHMEDABAD - TMI - Additions made u/s.206C(1) on account of non-collection of TCS on sale of scrap - interest charged u/s.206C(7) - whether the CIT(A) has erred in accepting the assessee’s argument on merit submitting belated Form No.27C along with consequential interest? - Held that:- We make it clear in Revenue’s appeal that there is no substantive ground challenging lower appellate findings of the CIT(A)’s order clarifying that a part of its high seas sales is already .....

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The Revenue is unable to point any distinction on facts or law therein. We accordingly see no reason to interfere with lower appellate findings remitting the issue back to the Assessing Officer for adjudication afresh as per law. The Revenue’s corresponding ground accordingly fails. The Revenue’s next argument seeks to restore interest component of the above stated impugned demand. We are of the view that this issue is a consequential one only. We uphold lower appellate findings qua this interes .....

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SHRI MANISH BORAD, ACCOUNTANT MEMBER Revenue by : Shri C.S. Anjaria, D.R. Assessee by : Shri Kamlesh Rathod, C.A. O R D E R PER S.S. GODARA, J.M. This set of eight cases comprises of Revenues four appeals and assessee s Cross Objections therein for Assessment Years 2011-12 to 2014-15. The same arise against CIT(A) s different orders, all dated 09.04.2015, in case nos.CIT(A)/Jam/199/14-15/41, CIT(A)/Jam/200/14-15/41, CIT(A)/Jam/201/14-15/41& CIT(A)/Jam/202/ 14-15/41 Assessment Year-wise resp .....

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grounds :- 1. The Ld. CIT(A) has erred in law as well as on facts in law in deleting the additions made u/s.206C(1) of the I.T. Ac on account of non-collection 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 206C(1) apply to the assessee. 2. The Ld. CIT(A) has erred in law as well as on facts in issue of direction in violation of proviso to sub sec. (7) of section 206C of I.T. Act to the A.O. that in .....

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d after the detection of default by the Department. 4. The ld. CIT(A) has erred in law as well as on facts in directing to consider only the balance period high seas sale and to consider belatedly filed form No.27C as sufficient compliance. 5. The Ld. CIT(A) has erred in law as well as on facts in directing not to charge interest on sales where form no.27C are filed belatedly and fatter detection of default by the department. 6. On the facts and in the circumstances of the case, the ld. CIT(A) o .....

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Income Tax (Appeals), Jamnagar has erred in law as well as on facts in holding/confirming that trading activity of recycled Non Ferrous metals by the respondent is falling within the coverage of section 206C(1). 2. The learned Income Tax Officer, TDS-3, Jamnagar as well as the Honourable Commissioner of Income Tax (Appeals), Jamnagar has erred in law as well as on facts by invoking provisions of section 206C in spite of the fact that the respondent is not engaged in any manufacturing activity. 3 .....

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well as the Honourable Commissioner of Income Tax (Appeals), Jamnagar has erred in law as well as on fact by invoking provisions of section 206C which are not applicable to trader of recycled non ferrous metals as the respondent does not fall within the definition of the Buyer as given in the explanation to the section 206C of the Act. 5. The learned Income Tax Officer, TDS-3, Jamnagar as well as the Honourable Commissioner of Income Tax (appeals), Jamnagar has erred in law as well as on facts i .....

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d outside the territory of India. Thus, even otherwise the sale made by the respondent is not falling within the coverage of section 2066C of the Act. 7. The learned Income Tax Officer, TDS-3, Jamnagar as well as the Honourable Commissioner of Income Tax (appeals), Jamnagar has erred in law as well as in facts while working out the figure of sale of scrap as ₹ 57,99,82,656/- which is actually high seas sales and the aid issue is already decided in the earlier years in respondent s favour a .....

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ase on 17.10.2013. It was noticed during verification of books of account that the assessee had sold scrap material of ₹ 1,50,20,20,771/- in relevant Financial Year 2011-12 liable for tax collected at source. The Assessing Officer referred to section 206C(1) read with Rules 37C&D of the Income Tax Rules describing for such a tax collection on above stated scrap sales @ 1%. He would quote scrap definition under the above stated provision. The Assessing Officer sought to treat the assess .....

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sold in local market. It emphasised the fact of not being a manufacturing unit. The assessee asserted that scrap sold was not the one covered under section 206C Explanation (b) as per Rajkot Bench decision of the Tribunal. It was finally explained that neither the scrap has been generated from manufacture or mechanical working of material nor was it usable as such. 6. We notice from the case file that the Assessing Officer did not agree to either of the above stated pleas. He referred to Tribun .....

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went by the assessee s survey statement only admitting not to have collected tax at source for the reasons already indicated hereinabove. He, thereafter, took notice of the fact that the relevant title to section 206(1) contained crucial expression profit and gains from the business of trading ......... in scrap etc. He disagreed with assessee s claim of having acted under bonafide belief. All this resulted in the impugned tax collected at source (TCS) demand of ₹ 82,93,752/- being raised .....

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authorities. He is therefore bound by that declaration. Once it is declared as waste and scrap under the Customs Tariff Act, it necessarily follows that it is in the nature of waste and scrap, which is definitely not usable as such. Be that as it may, the definition of scrap under Explanation (b) is wider in scope than the definition of scrap as given in the Customs Tariff Act. In this view of the matter, materials recovered on demolition of buildings, old machines/fixtures/fittings sold as scr .....

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ings was that it is not an assessee in default as having collected Form No.27C; albeit belatedly, a part of its scrap sales in question is already covered in earlier survey exercise decided in its favour and pending before the Hon ble jurisdictional High Court as follows :- 7.1 Grounds No. 5 & 6 is regarding whether appellant is "assessee is default " despite sales being made to manufacturers and declaration in form No 27C obtained and filed with the office of the Commissioner of I .....

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required to be considered. Thus, for the sake of convenience the details of the sales covered by the AO with that of already covered is given here in below: Particulars Amount (Rs.) Total High seas sales 57,99,82,656/- Less High seas already covered in the previous survey upto (06.12.2010) 48,49,63,372/- Balance High seas sales 9,50,19,284/- Thus, as held in ground no. 2 to 4 above the assesses is liable for collecting the TCS on sales of scrap of ₹ 9,50,19,284/- (i.e. Highseas sales not c .....

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the month following the month in which declaration is furnished. In the appellant's case, it is seen from the paper book that the appellant submitted the declaration in Form No. 27C to the office of the CIT may be late. The submission of form no. 27C by the appellant is also confirmed by the AO in his order but the same was filed late it was not considered by him and he has held the assessee in default and the accordingly demand is raised. I have gone through the facts and submission made a .....

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eferred to in section 206C(1A) was received by the appellant, then thereafter the appellant could not legally collect the TCS from the buyers and consequently the appellant cannot be treated as an assessee in default for not collection of TCS from such buyer. The case of the appellant is squarely covered by this decision. Therefore, View of AO is erroneous. Consequently, the appellant cannot be treated as an assessee in default for non collection of TCS on sale of scrap to manufacturer of ₹ .....

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the order was also made available on record. The assessing officer has already raised the demand on the sale sand matter has already decided in favour of the assessee and the same is pending before the Gujarat High Court. Thus, the period which is already covered and decided cannot be again taken up and thus the figure taken at ₹ 57,99,82,656/- is in correct since out of that sales to the date of first survey by ITO TDS-3, Jamnagar which comes to ₹ 48,49,63,372/-covered and hence the .....

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4/-. In the light of the ground no. 5, 6 & 8 ground no. 9, 10 & 11 is also allowed and AO is directed to consider the belated filed Form No. 27C as sufficient compliance and the appellant is not liable for TCS to the extent of the forms filed by them. Thus, the grounds no. 9, 10 & 11 are allowed. 9. The ground no. 12 covers the aspect of chargeability of interest. Since the assessee is not liable for TCS as the sales for the period is to the manufacture and Form No. 27 C is filed the .....

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ake it clear in Revenue s appeal that there is no substantive ground challenging lower appellate findings in paragraph no.8 of the CIT(A) s order clarifying that a part of its high 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. T .....

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