The Income Tax Office, TDS-3, JAMNAGAR V. M/s. Siyaram Metal Udyog Pvt. Ltd., JAMNAGAR

ITA 10/RJT/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2390 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-10-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 09-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIMAL I MEHTA
• Assessee Lawyers: KAMLESH RATHOD RESPOND
• Section: 143(3); 260A

Judgement Text

I.T.A. N O. 1 0 /RJT/201 3 : ASSESSMENT YEAR: 20 11 - 12 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT . [CORAM: PRAMOD KUMAR , AM AND RAJPAL YADAV, JM ] I.T.A. NO. 1 0 /RJT/ 201 3 ASSESSMENT YEAR: 20 11 - 12 INCOME - TAX OFFICER,TDS - 3, JAMNAGAR . ......... ...... .... APPELLANT V S. M/S SIYARAM METAL UDYOG PVT. LTD., (EARLIER KNOWN AS M/S SIYARAM METAL UDYOG) B - 18, SHANKAR TEKRI, UDHYOGNAGAR, JAMNAGAR . . RESPONDENT T AN RKTSO7123E APPEARANCES BY: VIMAL I. MEHTA ........... FOR THE APPELLANT KAMLESH RATHOD .......... F O R THE RESPONDENT D ATE OF CONCLUDING THE HEARING : 7 TH OCTOBER, 2015 DATE OF PRONOUNCING THE ORDER : 4 TH JANUARY, 2016. O R D E R PER PRAMOD KUMAR , AM : BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 15 TH OCTOBER , 201 2 PASSED BY THE CIT(A), IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961, FOR THE ASSESSMENT YEAR 20 11 - 1 2 ON THE FOLLOWING GROUNDS : - 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITIONS MADE U/S 206C(1) OF THE I.T. ACT ON ACCOUNT OF NON - COLLECTION OF TCS OF RS.74,57,647/ - ON SALE OF SCRAP AMOUNTING TO RS.74,57,64,795/ - AND INTEREST CHARGED U/S 206C(7) OF RS.21,74,561/ - INSPITE OF THE FACT THAT THE ASSESSEE WAS A TRADER OF SCRAP AND THE PROVIS IONS OF SECTION 206C(1) APPLY TO THE ASSESSEE. 2. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN OVERLOOKING THE HEAD NOTE OF SEC.206C WHICH CLEARLY SPEAKS THAT THE TCS PROVISIONS U/S 206C ARE APPLICABLE NOT ONLY ON THE SCRAP GENERATED FROM THE ACTIVI TY OF I.T.A. N O. 1 0 /RJT/201 3 : ASSESSMENT YEAR: 20 11 - 12 PAGE 2 OF 4 MANUFACTURING OR MECHANICAL WORKING OF MATERIALS BUT ALSO ON THE PROFITS AND GAINS FROM THE BUSINESS OF TRADING IN SCRAP. 3. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DECIDING TE ABOVE ISSUES AGAINST THE DEPARTMENT AS THE HEAD NOTE DOES NOT PROVIDE THAT SUCH SCRAP SHOULD BE ARISEN FROM THE MANUFACTURE OR MECHANICAL WORKING OF THE ASSESSEE BUT PROVIDES THAT IT SHOULD BE ARISEN FROM BUSINESS OR TRADE. 4. T H E LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE CBDT CIRCULAR DATE D 21/05/2012 WHEREIN IT HAS BEEN CLARIFIED THAT THERE IS NO REQUIREMENT THAT THE GOODS TO BE ELIGIBLE FOR SCRAP SHOULD BE PRODUCED/MANUFACTURED BY THE SELLER ITSELF (COPY ENCLOSED FOR KIND & READY REFERENCE). 5. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN DELETING THE ADDITIONS RELYING ON THE DECISIONS IN THE CASE OF NATHULAL LAVTI (ITA NO.1167 & 1168/RJT/2010) AND HE HAS OVER LOOKED THE FACT THAT THE DEPARTMENT HAS DIRECTLY PREFERRED AN APPEAL AGAINST THIS DECISION BEFORE HON BLE HIGH COURT U/S 260A OF THE IT ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 7. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 8. IT IS, THEREFORE, PR AYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EFFECT. 2. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, SHRI RATHOD, LEARNED COUNSEL FOR THE ASSESSEE, FAIRLY ACCEPTED THAT THE ISSUE RAIS ED IN THIS APPEAL IS NOW COVERED AGAINST THE ASSESSEE, BY A SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF BHARTI AUTO PRODUCTS VS. CIT [)2013) 145 ITD I(SB RAJKOT)], BUT THE MATTER IS REQUIRED TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR GRANTIN G HIM AN OPPORTUNITY TO FILE FORMS 27C/27BA, AS THE CASE MAY BE, FOLLOWING THE DIRECTIONS OUT IN THE SPECIAL BENCH ORDER. HE ALSO INVITED OUR ATTENTION TO THE FOLLOWING WRITTEN SUBMISSIONS AT PAGE 1 & 2 OF THE PAPER BOOK : - 1. THE RESPONDENT COMPANY WAS ERSTW HILE A PROPRIETARY CONCERN OF SHRI RAMGOPAL MAHESHWARI NAMED AS M/S SIYARAM METAL UDHYOG AND DURING THE YEAR CONSIDERATION THE PROPRIET A RY FIRM CONVERTED INTO A PRIVATE LTD. COMPANY ON ONGOING BASIS W.E.F. 1.6.2010. I.T.A. N O. 1 0 /RJT/201 3 : ASSESSMENT YEAR: 20 11 - 12 PAGE 3 OF 4 2. THE RESPONDENT COMPANY IS ENGAGED IN TH E BUSINESS OF TRADING OF IMPORTED NON - FERROUS METALS. THE RESPONDENT COMPANY IMPORT THE BRASS METAL FROM VARIOUS FOREIGN COUNTRIES WHICH CONTAINS USED DISCARFED TAPES, OTHER SANITARY PARTS, ARTICLES OR THINGS WHICH CONTAINS COPPER, ZINC OR BRASS METAL. IMP ORTED METAL ITEMS ARE SOLD IN THE LOCAL MARKETS, AGAINST C/F FORM AND TO THE EXPORTER AGAINST FORM NO. H TO THE MANUFACTURER OR TO THE TRADER FOR A FURTHER SALE TO THE ULTIMATE MANUFACTURER. 3. A SURVEY WAS CONDUCTED AT THE RESPONDENT S BUSINESS PREMISES ON 6 .12.2010 BY THE INCOME - TAX OFFICER, TDS - 3, NAMNAGAR, AND BASED ON SURVEY PROCEEDINGS THE INCOME - TAX OFFICER, TDS - 3, JAMNAGAR PASSED AN ORDER U/S 206C(6)/(7) DATED 26.3.2012 BY RAISING DEMAND OF RS.74,57,647/ - AND INTEREST THEREON OF RS.21.74,651/ - . 4. BEING A GGRIEVED BY THE SAID ORDER THE RESPONDENT COMPANY FILED AN APPEAL BEFORE THE HON BLE COMMISSIONER OF INCOME TAX (APPEALS) - II, RAJKOT. 5. THE HON BLE CIT(A) - II, RAJKOT VIDE HIS ORDER DATED 15.10.2012 HAS ALLOWED THE APPEAL IN THE FAVOUR OF THE RESPONDENT COMPA NY BY RELYING UPON THE JUDGMENT OF THE HON BLE ITAT, RAJKOT BENCH S DECISION IN THE RESPONDENT COMPANY S OWN CASE VIDE ORDER IN ITA NO.1167 & 1168/RJT/2010 DATED 17.6.2011 (COPY OF ORDER IS ENCLOSED AT PAGES 3 TO 15). 6. AGAINST THE SAID ORDER PASSED BY THE H ON BLE ITAT IN ITA NO. 1167 & 1168/RJT/2010 DATED 17.6.2011 THE DEPARTMENTAL APPEAL IS PENDING BEFORE THE HON BLE GUJARAT HIGH COURT. 7. BEING AGGRIEVED BY THE ORDER OF THE HON BLE CIT(A) - II, RAJKOT THE INCOME - TAX OFFICER, TDS - 3, JAMNAGAR HAS FILED THIS APPEA L. 8. THE ORDER IN QUESTION WAS PASSED FOR THE PERIOD 1.4.2010 TO 6.12.2010 I.E. TO THE DATE OF SURVEY RAISING A DEMAND OF RS.74,57,647/ - AND INTEREST THEREON RS.21,74,651/ - (COPY OF THE ORDER IS ENCLOSED AT PAGES 16 TO 25.) 9. AN ANOTHER ORDER FOR THE SAME ASSE SSMENT YEAR IS PASSED FOR THE REMAINING PERIOD AGAINST THE RESPONDENT COMPANY. THE RESPONDENT COMPANY HAS RELIED UPON THE DIRECTION OF THE HON BLE TRIBUNAL S ORDER IN THE CASE OF M/S BHARTI AUTO PRODUCTS VS. CIT II , RAJKOT IN ITA NO.391 & 392/RJT/2011 DAT ED 6.9.2013 FOR AY 2009 - 10 & 2010 - 11 (COPY OF ORDER IS ENCLOSED AT PAGE 26 TO 44 AND SUBMITTED THE PROOF THAT THE PURCHASER HAS ACCOUNTED/PAID THE TAX BY SUBMITTING THE FORM NO.27C/27BA AS APPLICABLE FOR THE AY 2001 - 12. A COPY OF THE ASSESSMENT ORDER AS WE LL AS APPELLATE ORDER FOR THE REMAINING PERIOD IS ENCLOSED AT PAGES 45 TO 55. I.T.A. N O. 1 0 /RJT/201 3 : ASSESSMENT YEAR: 20 11 - 12 PAGE 4 OF 4 3. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITS THAT HE HAS NO OBJECTION TO THE MATTER BEING REMITTED TO FILE OF THE LIMITED VERIFICATION AS ABOVE . 4. IN THE LIGHT OF THE ABOVE D ISCUSSIONS, AND WITH THE CONSENT OF THE PARTIES, WE HEREBY REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSES OF AFFORDING ASSESSEE AN OPPORTUNITY TO FILE REQUISITE DECLARATION FORMS, AND DECIDING THE MATTER AFRESH, IN THE LIGHT OF THE SAME AND THE LAW LAID DOWN BY SPECIAL BENCH IN THE CASE OF BHARTI AUTO PRODUCTS (SUPRA). ORDERED ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED TODAY ON 4 TH DAY OF JANUARY, 2016. SD/ - SD/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 4 TH DAY OF JANUARY, 2016 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT ( 3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT