TMI Blog2018 (12) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2013-14 wherein the assessee has taken the following grounds of appeal.:- 1. That the learned Commissioner of Income Tax (Appeals) has erred in maintaining addition of sale amount of ₹ 42,73,836/- on account of non deduction of TCS as goods sold is other than scrap, therefore, TCS is not applicable. 2. That the learned Commissioner of Income Tax (Appeals) has erred in maintaining interest of ₹ 26,026/- charged by Income Tax Officer. 2. None appeared on behalf of the assessee nor any adjournment application was filed with the Registry. It was accordingly decided to hear the matter ex-parte qua the assessee based on material available on record. 3. Briefly stated, the facts of the case are that the assessee mainly deals in purchase/sale of old/waste iron and steel items. A spot verification regarding TDS/TCS compliance was carried out by the Revenue at the premises of the assessee on 24/02/2014. On perusal of the TCS statement and other details submitted by the assessee, the Assessing Officer observed that during the F.Y 2012-13, the assessee had sold scrap amounting to ₹ 1,98,65,861/- and on sale of ₹ 56,07,027/-, the assessee has collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 206C of the Act, we find that all these contentions have been dealt with in detail and the matter is squarely covered against the assessee by the decision of Special Bench of Tribunal in the case of Bharti Auto Products Vs. CIT-II (Supra) wherein it has been held as under (head Notes): Section 3 of the Central Excise Act mandates levy of duty on all excisable goods (excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985. It therefore follows that the Central excise duty cannot be levied on the goods including scrap which are not manufactured or produced in India. It is in the context of the aforesaid provision that the courts and Tribunal have held, in the context of levy of excise duty, that the waste and scrap not generated from the manufacture of the prime product cannot be subjected to levy of central excise duty in the hands of non manufacturers. This context is completely absent in the Income-tax Act and, therefore, the requirement that the waste and scrap must be generated by the assessee himself from the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of materials undertaken by the assessee himself. Scrap from the manufacture or mechanical working of materials may arise as a result of manufacturing activity undertaken by the assessee himself or by anyone else. Similarly, scrap may also arise from the mechanical working of materials, which is different from manufacture. For the aforesaid reasons, it is held that tax is required to be collected at source from the buyer, in terms of section 206C, on sale of, inter alia, scrap being waste and scrap from the manufacture or mechanical working of materials undertaken by the assessee himself or by anyone else. A seller of scrap is neither required to be a manufacturer himself nor the scope of 'scrap', as defined in Explanation (b), is restricted to scrap generated from the manufacture or mechanical working of materials undertaken by the seller himself. It is sufficient for the applicability of section 206C if the person sought to be fastened with liability under section 206C is a seller of scrap being waste as well as scrap from the manufacture or mechanical working of materials provided all other conditions for the applicability of section 206C are also satisfied. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 206C. In this view of the matter, the ground taken by the assessee in both the assessment years under appeal is dismissed. [Para 37] It was further submitted that the provisions of section 206C require a seller to collect the tax at source from the buyer (and from none else) on sale, inter alia, of scrap. Attention was drawn to the definition of 'buyer' as given in subclause (i) of clause (aa) of Explanation to section 206C, which defines a 'buyer' as 'a person who obtains in any sale, by way of auction, tender, or any other mode, goods of the nature specified in the Table in sub-section (1) ' It was submitted that the buyer from whom tax is required to be collected at source should be one who obtains in any sale, by way of auction, tender or any other mode, goods of the specified nature. Placing reliance on the interpretative tools of noscitur a sociis and ejusdem generis, it was submitted that the phrase 'any other mode' in the expression 'a person who obtains in any sale, by way of auction, tender or any other mode ..' in Explanation (aa)(i) would get its meaning from the words preceding it, namely, 'by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in aid that rule. Similarly, a phrase cannot be construed ejusdem generis unless it is susceptible of meaning analogous to the preceding words. [Para 41] As already stated earlier, section 206C seeks to prevent mischief, i.e., evasion of taxes in certain types of businesses. The words defining a buyer as 'a person who obtains in any sale, by way of auction, tender or any other mode ..' in Explanation (aa)(i) are plain and simple in their meaning and content. The buyer is one who obtains specified goods 'in any sale' which could be by way of auction, tender 'or any other mode'. The use of the word 'or' in the aforesaid expression shows that all the three phrases (namely, auction, tender or any other mode) are intended to carry independent meaning without being controlled by each other. The use of the words 'any other mode' in the said expression further shows that the mode of sale need not be by way of auction or tender alone but could be by any other mode. The words any other mode are words of wide amplitude and, therefore, cover all possible modes of sales in addition to specific modes of sales by way of auction or te ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
