TMI Blog2018 (4) TMI 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are generated out of manufacturing process of the assessee. The words waste and scrap should have nexus with the manufacturing or mechanical working of material. Thereafter, 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 . The word waste which is denotes to singular item and thus the singular item would be waste and scrap. As gone through the details of scrap sold which shows that the assessee has sold Plastic Kabrs, Old Tyre weighing scale, M S Barrel Gunny Bags, rubber tubes, M S Scrap ceiling wires which can be re used. These items of scrap sold are not generated out of manufacturing processes of sugar factory, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act in the case of the assessee. Therefore, the assessee cannot be held to be in default. The assessee is not required to deduct tax u/s 206C(6) of the Income-tax Act on the items of scrap as noted above. Assessee cannot be treated a assessee in within the meaning of section 206C - Ex-consequenti, no tax could be raised under section 201(1) and no interest could be charged under section 201(1A) - Appeal of the assessee allowed. - SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER For the Assessee : Shri Mitish S. Modi, CA For the Revenue : Ms. R. Kavitha JCIT, Sr. D.R. ORDER PER O. P. MEENA, ACCOUTANT MEMBER: 1. This appeal filed by the assessee is directed against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 201(1) and under section 201(1A) was raised. 4. Being aggrieved, the assessee filed an appeal before the ld. CIT (A). The assessee has cited a decision in the case of Navine Flurorine International Ltd. [2011] 45 SOT 86 (Ahd) wherein the assessee has sold certain scrap of consisting of plastic drums, wooden scrap , plates materials, used oil, electric cables etc. was not held to be covered by the definition of scrap as defined under section 206C of the Act. However, the CIT (A) differed with the said decision and held the scrap should be interpreted in layman language which mean those items which could not be re used again in the manufacture of item produce by the assessee. Therefore, the scrap sold by the assessee falls under the defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of plastic drums, wooden scrap , plates materials, used oil, electric cables etc. was not held to be covered by the definition of scrap as defined under section 206C of the Act, and Nathulal P Lavi v. ITO [2011] 14 taxmann.com 94 (Rajkot) in support of his contention. 6. On the other hand, the ld. Sr. DR relied on the order of the AO. 7. We have heard the rival submissions and perused the relevant material on record. To appreciate the legal position we have to examine the definition as given in Explanation. For the purposes of this section; (b ) scrap means waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing processes of sugar factory, Therefore, such items sold are not filing under the definition given under explanation (b) to 206C of the Act. The words waste and scrap thus cannot be read differently as is considered by ld. CIT (A). The list of scrap sold by the assessee is reproduced above which are not connected with manufacture or mechanical working of material. The findings of the learned CIT(A) are based on presumption only that since the assessee is engaged in manufacture of sugar, therefore, entire scrap is generated out of its manufacturing activities. The findings of the learned CIT(A) are not based on any material or evidence. By the nature of the scrap items noted above, the same cannot be used while manufacturing gases or d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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