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| The Tax Publishers2020 TaxPub(DT) 0187 (Jp-Trib) INCOME TAX ACT, 1961
Section 206(1)
Where assessee was engaged in trading of items obtained from Ship Breaking Yard, the said items being re-usable could not be termed as “scrapâ€, as envisaged in the Explanation to section 206C(1) and hence, the assessee could not be held to be in default for non-collection of tax at source in respect of scrap sold by him.
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Tax collection at source - Under section 206C - Scrap - Items reusable as such
Assessee was a scrap dealer and was engaged in trading of scrap. As per AO, the assessee was liable to collect tax at source under the provisions of section 206C(1) in respect of scrap sold by him and held that the assessee was in default for non-collection of tax at source. Held: It was found that the assessee was engaged in business of trading of scraps obtained from Ship Breaking Yard. Further, the items generated out of ship breaking activity might be commercially known as “scrap” but such items are not waste and scrap, as they are re-useable. Therefore, the said items could not be termed as “scrapâ€, as envisaged in the Explanation to section 206C(1). Hence, the assessee could not be held to be in default for non-collection of tax at source in respect of scrap sold by him.
Relied:Azizbhai A. Lada v. ITO ITA No. 765/Ahd/2015 Order dated 10-1-2018
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 271CA
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