TMI Blog2020 (7) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... esale of the same goods by the assessee will not part take a different character. In view of the undisputed fact that what was purchased by the assessee is scarp subjected to TCS then the resale of the same material is also be treated as scrap and there is no scope of re-classification of the these goods at the time of sale. No merits or substance in the contention of the assessee. The decisions relied upon by the assessee are on specific facts of those cases and therefore, would not help the case of the assessee. As regards the contention of the assessee that some of the sales considered by the AO as scrap was actually sale of new goods. We note that the AO has considered the sale on the basis of the spot verification. However, now the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decided by considering the written submission of the assessee. 3. The hearing of this appeal was concluded through video conference in view of the prevailing situation of COVId-19 pandemic. The assessee is dealing in scraped material and has purchased railway scrap in auction which was subjected to TCS U/s 206C(1) of the Act. The Railway while receiving the payment from the assessee has also collected tax at source. The assessee sold the scrap to various buyers without collecting tax at source as required U/s 206C of the Income-tax Act. The Assessing Officer initiated the proceedings for holding the assessee as default in respect of non collection of tax in terms of Section 206C(6A)/(7) of the Act. Accordingly, the AO passed the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not generated in the manufacturer or mechanical working process and therefore, does not fall in the definition of scrape as in provided clause-(b) of explanation to Section 206C of the Act. Hence, the assessee has contended that the provisions of Section 206C are not applicable. In support of his contention, he has relied upon the decision of Hon'ble Gujarat High Court in case of Priya Blue Industries (P) Ltd. 381 ITR 210 as well as decision of Ahmedabad Bench of the Tribunal in case of Navine Fluorine International Limit v. ACIT, TDS [ITA No. 1213 and 1214/Ahd/2010]. Reliance was also placed on the decision of Rajkot Bench of the Tribunal in case of Nathulal P. Lavati v. ITO (65 DTR 133). Alternatively, the assessee has submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso carefully perused the order passed U/s 206C(6A)/(7) of the IT Act. There is no dispute that the assessee purchased scrap material from the railways which was subjected to TCS and the said material was again sold by the assessee to various parties who were stated to be traders as well as consumers of the scraped without collecting the tax at source by the assessee. Therefore, the AO initiated the proceedings for holding the assessee in default U/s 206C(6A)/(7) of the Act. The First contention of the assessee is that the material sold by the assessee which was purchased from the railways in the auction does not fall in the definition of scrap as provided in clause (b) of Section 206C of the Act. For ready reference we quote clause (b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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