Shri Ramgopal O Maheshwari, JAMNAGAR V. The Income Tax Officer, JAMNAGAR

ITA 1170/RJT/2010

• Counselvise Citation: 117024914 RSA 2010
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-05-2011
• Assessment Year: 2010-2011
• Appeal Filed On: 15-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVNISH KUMAR; N R SANEC I T
• Assessee Lawyers: J C RANPURA
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A.NO.1167 & 1168 /RJT/2010. (ASSESSMENT YEAR 2009-10 & 2010 -11). SHRI NATHULAL P. LAVTI, VS. THE I.T.O.(TDS)-3, PROP.OF MAHALAXMI METAL CORP. JAMNAGAR. SPL.SHED NO.431,GIDC, UDYOGNAGAR, JAMNAGAR. (APPELLANT) (RESPONDENT) I.T.A.NO.1169 & 1170 /RJT/2010. (ASSESSMENT YEAR 2009-10 & 2010 -11). SHRI RAMGOPAL O. MAHESHWARI, VS. THE I.T.O. (TDS)-3, PROP.OF SIYARAM METAL UDYOG, JAMNA GAR. B-18,GIDC,SHANKER TEKRI, UDYOGNAGAR, JAMNAGAR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI J.C. RANPURA, C.A . REVENUE BY : SHRI N. R. SANE,C.I.T.-D. R. & SHRI AVNISH KUMAR, D.R. O R D E R PER AL GEHLOT, AM: THESE FOUR APPEALS FILED BY TWO DIFFERENT ASSESSES, VIZ. SHRI NATHULAL P. LAVTI AND SHRI RAMGOPAL O. MAHESHWARI A GAINST THE TWO SEPARATE ORDERS, ASSESSEE-WISE PASSED BY C.I.T.(A)-II, RAJKO T BOTH DATED 16-07-2010 RESPECTIVELY. SINCE ISSUE RAISED IN ALL THE APPEAL S IS BASED ON IDENTICAL SET OF FACTS, FOR THE SAKE OF CONVENIENCE, WE DECIDE ALL T HE FOUR APPEALS BY THIS COMMON ORDER. 2. THE GROUND RAISED IN THESE APPEALS BY THE ASSESS EE PERTAINS TO INVOKING OF PROVISIONS OF SECTION.206C OF THE ACT AND THEREB Y RAISING DEMAND OF RS.3,17,214/- FOR A.Y. 2009-10 AND RS.7,93,430/- FO R A.Y.2010-11 IN EACH CASE. ITA 11 67 TO 1170/RJT/2010. . A.YS.2 009-10 & 2010-11. 2 3. THE BRIEF FACTS OF THE CASE NOTICED ORDER OF THE ASSESSING OFFICER FOR A.Y.2009-10 ARE THAT THE ASSESSEE, AN IMPORTER AND DEALER IN RECYCLED FERROUS AND NON-FERROUS METALS, MAINLY BRASS AND COPPER, SO LD THE SAID RECYCLED METALS TO MANUFACTURERS AS WELL AS TO CERTAIN OTHER TRADER S. A SURVEY ACTION U/S.133A OF THE ACT WAS CARRIED OUT AT ASSESSEES PREMISES ON 2 3-02-2010. IT WAS REVEALED TO THE INCOME TAX OFFICER (TDS)-3, JAMNAGAR THAT TH E ASSESSEE SOLD SCRAP WORTH RS.2,83,22,756/- AND RS.7,49,31,721/-, IN EACH CASE , FOR A.YS 2009-10 AND 2010-11 RESPECTIVELY. THE A.O. FURTHER NOTICED THA T THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE ON THE SAID SCRAP SALES. THEREFORE, THE A.O. PASSED ORDER U/S.206C(6) / 206C(7) OF THE ACT WHEREBY HE DEMAND ED RS. 3,17,214 FOR ASSESSMENT YEAR 2009-10 AND RS. 7,94,340 BEING 1% O F THE SALE CONSIDERATION AND INTEREST THEREON FROM EACH ASSESSEE. ON APPEAL, THE C.I.T.(A) CONFIRMED THE ORDER OF THE A.O. OBSERVING THAT IT IS NOT NECESSAR Y THAT THE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE U/S.206C OF THE ACT ONLY IN CA SE WHERE THE ASSESSEE IS A MANUFACTURER. HE WAS OF THE VIEW THAT EVEN A TRADE R IS SUBJECT TO SEC.206C OF THE ACT AS TITLE OF THE SECTION IS VERY CLEAR THAT PROFITS AND GAINS FROM THE BUSINESS OF TRADING . THE C.I.T.(A) DID NOT ACCE PT THE ASSESSEES CONTENTION THAT THE GOODS SOLD DID NOT PARTAKE THE CHARACTER O F SCRAP. THE C.I.T.(A) WAS OF THE VIEW THAT THE ASSESSEE SOLD MATERIAL / SCRAP. THEREFORE, THE SALE FALLS WITHIN THE PURVIEW OF SECTION 206C AND THE ASSESSEE WAS LI ABLE TO DEDUCT TAX AT SOURCE @1% OF THE SALE CONSIDERATION UNDER THAT SECTION. ACCORDING TO THE C.I.T.(A) THE ASSESSEE MIGHT HAVE BOUGHT THE SCRAP AND SOLD THE S AME BUT THE SCRAP SOLD GENERATED DUE TO MANUFACTURING ACTIVITY ONLY. AND T HAT WHATEVER MAY BE THE NAME CALLED, BUT THE END RESULT IS THAT THE ASSESSE E HAD SOLD THE SCRAP. THE C.I.T.(A) ALSO DID NOT ACCEPT THE OPINION GIVEN BY A CHARTERED ACCOUNTANT WITH REGARD TO THE APPLICABILITY OF SEC.206C OF THE ACT. 4. THE LEARNED A.R. SUBMITTED THAT THE ASSESSEE IS AN IMPORTER AND A DEALER IN THE RECYCLED NON FERROUS METAL WHICH IS KNOWN AS SCRAP AMONG THE LOCAL BUSINESS COMMUNITY AND ASSESSED AS SUCH SINCE LONG. THE LD.AR POINTED OUT THAT MATERIAL IMPORTED BY THE ASSESSEE IS BEING SCR AP WHICH IS DERIVED FROM ON ITA 11 67 TO 1170/RJT/2010. . A.YS.2 009-10 & 2010-11. 3 DISMANTLING OF CONSTRUCTED RESIDENTIAL AND COMMERCI AL BUILDINGS AND OTHER SUPER STRUCTURES. THE LD. AR SUBMITTED THAT IN THEIR BUS INESS LINE SOME OF THE MATERIALS CALLED AS HONEY YELLOW BRASS SCRAP WHICH CONSISTS OF MIXED YELLOW BRASS SOLIDS, INCLUDING BRASS CASTINGS, ROLLED BRASS ROD BRASS. IT IS CALLED HONEY AS THESE MATERIALS ARE TO BE SEGREGATED FROM PLATES AN D OTHERS WHEREIN THESE ARE EMBOSSED OR ATTACHED. DURING THE YEAR THE ASSESSEE SOLD SUCH RECYCLED METALS TO THE MANUFACTURERS AS WELL AS TO THE TRADERS. TH E ASSESSEE IS NEITHER A MANUFACTURER OF ANY PRODUCT NOR IS HE CONDUCTING AN Y MECHANICAL WORKING OF MATERIALS WHICH ARE DEFINITELY NOT USABLE AS SUCH. THE LEARNED A.R. SUBMITTED THAT EXPLANATION (B) TO SEC.206C, DEFINES A SCRAP AS WASTE AND SCRAP FROM THE MANUFACTURE OR MECHANICAL WORKING OF MATERIALS WHIC H IS DEFINITELY NOT USABLE BECAUSE OF BREAKAGE, CUTTING-UP WEAR AND OTHER REAS ONS. THE LEARNED A.R. SUBMITTED THAT THE C.I.T.(A) IS NOT CORRECT IN HOLD ING THAT EVEN A TRADER CAN BE BROUGHT UNDER THE PURVIEW OF SEC.206C OF THE ACT AS THE SUBSTANTIVE PORTION OF THE TITLE OF SECTION DESCRIBES SO. THE LEARNED A.R . SUBMITTED THAT THE C.I.T.(A) FAILED TO APPRECIATE THE FACT ON RECORD THAT THE AS SESSEE WAS IMPORTING SCRAP AND AFTER RECYCLING SOLD THE SAME TO BRASS MANUFACTURER S AS RAW-MATERIALS. THE LEARNED A.R. SUBMITTED THAT METAL / SCRAP SOLD BY T HE ASSESSEE WAS NOT GENERATED AS A RESULT OF ANY MANUFACTURING OR MECHA NICAL WORKING OF MATERIALS BY THE ASSESSEE. THEREFORE, AS PER EXPLANATION (B) TO SEC.206C, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE FROM THE B UYER. THE INTERPRETATION OF SECTION HAS TO BE DONE LITERALLY ALONG WITH THE REL EVANT EXPLANATION AND IT IS THEREFORE, NECESSARY TO READ THE WORDS WASTE AND S CRAP TOGETHER. THE LEARNED A.R. SUBMITTED RELYING UPON THE DECISION OF DELHI H IGH COURT IN THE CASE OF C.I.T. VS. SUMI MOTHERSON INNOVATIVE ENGINEERING LTD. 195 TAXMAN (DELHI) 313 WHEREIN IT IS HELD THAT THE INTENTION OF THE LEGISL ATURE IS TO BE JUDGED FROM THE LANGUAGE USED IN THE LEGISLATION THAT IF THE LANGUA GE IS PLAIN AND UNAMBIGUOUS, EFFECT IS TO BE GIVEN WITHOUT GOING BEHIND THE WISD OM OF THE LEGISLATIVE AND ALSO REGARDLESS OF THE RESULT. IT IS ALSO A CARDINAL PR INCIPLE OF INTERPRETATION OF FISCAL STATUTES THAT THEY SHOULD BE CONSTRUED STRICTLY. T HE LEARNED A.R. SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE BY DECISION OF ITAT, ITA 11 67 TO 1170/RJT/2010. . A.YS.2 009-10 & 2010-11. 4 AHMEDABAD BENCH IN THE CASE OF NAVINE FLOURINE INTE RNATIONAL LTD., SURAT (2011) 10 TAXMAN.COM 78 (AHMEDABAD ITAT), ITA NOS.1213 & 1 214/AHD/2010 DATED 15-02-2011. 5. THE LEARNED D.R. ON THE OTHER HAND, RELIED UPON THE ORDER OF C.I.T.(A) AND SUBMITTED THAT PROVISIONS OF SECTION 206C DOES NOT LEAVE ANY SCOPE FOR INTERPRETATION AS TO WHETHER THE ASSESSEE IS A TRAD ER OR MANUFACTURER. WHAT THE SECTION AUTHORIZES IS, AN ASSESSEE, WHO SELLS SCRAP WHICH IS NOT USABLE AS SUCH HAS TO DEDUCT TAX FROM THE BUYER OF THE SCRAP AT TH E RATE PRESCRIBED. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES, RECORD PERUSED. THE ISSUE FOR CONSIDERATION BEFORE US IS WHETHER OR NOT, AN ASSESSEE WHO IMPORTS SCRAP AND SELLS THEM IN THE LOCAL MARKET, COULD BE BROUGHT UNDER THE PURVIEW OF SECTION 206C OF THE ACT. ON PERUSAL OF RECORD WE F IND THAT THE NATURE OF GOODS IMPORTED BY THE ASSESSEE AS STATED BEFORE THE REVEN UE AUTHORITIES IS SCRAP FROM DEMOLISHED BUILDINGS AND OTHERS. THIS FACT IS SUPP ORTED BY THE FACTS NOTED BY A CHARTERED ACCOUNTANT WHILE GIVING HIS OPINION THAT THE MATERIAL IMPORTED BY THE ASSESSEE IS BEING SCRAP WHICH IS DERIVED ON THE BAS IS OF DISMANTLING OF CONSTRUCTED RESIDENTIAL BUILDINGS, FACTORIES AND OT HER SUPERSTRUCTURES AND IT IS NOT GENERATED OUT OF SOME MANUFACTURING PROCESS CARRIED OUT BY SOMEBODY. THIS FACT HAS BEEN NOTED BY THE AO IN HIS ORDER AT PARA XIX ON PAGE 9. THE CIT(A) DID NOT ACCEPT ASSESSEES CONTENTIONS BECAUSE AS AC CORDING TO HIM THE DEFINITION OF SCRAP HAS TWO DISTINCT LIMBS AND EVEN IF ONE OF THE LIMBS IS APPLICABLE, AN ASSESSEE CAN BE TREATED AS SUCH THOUGH HE DEALS WIT H SCRAP, NOT USABLE AS SUCH. THE RELEVANT PORTION OF THE ORDER OF CIT(A) IS EXTR ACTED BELOW: (I) SCRAP MEANS WASTE; AND (II) SCRAP FROM THE MANUFACTURE OR MECHANICAL WORKI NG OF MATERIALS THE ABOVE INDICATES THAT ONLY WASTE MATERIALS MA Y PARTAKE THE CHARACTER OF SCRAP. THIS FIRST LIMB OF THE D EFINITION DEFINITELY APPLIES TO THE APPELLANTS CASE, BECAUSE HE IMPORTS ITA 11 67 TO 1170/RJT/2010. . A.YS.2 009-10 & 2010-11. 5 NON-FERROUS WASTE MATERIALS FROM DISMANTLED BUILDIN GS. THIS FURTHER CONVEYS THAT THERE IS NO NEED TO APPLY THE SECOND LIMB TO THE APPELLANT (I.E.) SCRAP NEED NOT TO HAVE ARISEN FROM ANY MANUFACTURE, OR MECHANICAL ACTIVITY, IF THE FIR ST LIMB IS APPLICABLE AND APPLIED. 7. FROM THE ABOVE IT IS CLEAR THAT THERE IS NO DISP UTE REGARDING THE FACT THAT GOODS (SCRAP) SOLD BY ASSESSEE WAS NOT FROM THE MAN UFACTURE OR MECHANICAL WORKING OF MATERIALS WHICH IS DEFINITELY NOT USABLE AS SUCH BECAUSE OF BREAKAGE, CUTTING UP, WEAR AND OTHER REASONS. EVEN DURING TH E COURSE OF SURVEY NO SUCH MATERIAL WAS FOUND AND PUT ON RECORD BASED FROM WHI CH IT CAN BE SAID THAT THE SCRAP / GOODS SOLD WAS OF ABOVE NATURE. THE MAIN T HRUST OF ARGUMENT OF THE ASSESSEES IS THAT THEY ARE ONLY TRADERS; THEY ARE N OT INTO ANY MANUFACTURING ACTIVITY WHICH WOULD YIELD ANY SCRAP; AND WHAT THEY SOLD, IS NOT SCRAP AS DEFINED IN EXPLANATION (B) TO SECTION 206C OF THE ACT. WHE REAS THE CASE OF THE REVENUE IS THAT THE HEADING OF PROVISIONS OF SECTION READS PROFITS AND GAINS FROM THE BUSINESS OF TRADING IN ALCOHOLIC LIQUOR, FOREST PRO DUCE, SCRAP, ETC.; AND THAT A TRADER IN SCRAP NOT NECESSARILY BE A MANUFACTURER I NASMUCH AS THAT THE SCRAP SOLD BY THE ASSESSEES ARE ALSO GENERATED FROM MANUF ACTURING ACTIVITIES CARRIED OUT BY SOME MANUFACTURERS OR OTHERWISE. 8. IN THIS BACKDROP, WE MOVE TO ANALYSE RELEVANT PR OVISIONS IN THE ACT. PROVISIONS OF SECTION 206C(1) READ AS BELOW: 206C. (1) EVERY PERSON, BEING A SELLER SHALL, AT THE TIME OF DEBITING OF THE AMOUNT PAYABLE BY THE BUYER TO THE ACCOUNT OF THE BUYER OR AT THE TIME OF RECEIPT OF SUCH AMOUNT FROM THE SAID BUYER IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER COLLECT FROM THE BUYER OF ANY GOODS OF THE NATURE SPECIFIED IN COLUMN(2) OF THE TABLE BELOW, A SUM EQUAL TO THE PERCENTAGE, SPECIFIED IN THE CORRESPONDING ENTR Y IN COLUMN (3) OF THE SAID TABLE, OF SUCH AMOUNT AS INCOME-TAX; TABLE. SL. NO. NATURE OF GOODS. PERCENTAGE. (1) (2) (3) ITA 11 67 TO 1170/RJT/2010. . A.YS.2 009-10 & 2010-11. 6 (I) ALCOHOLIC LIQUOR FOR HUMAN ONE PER CENT. CONSUMPTION. (II) TENDU LEAVES TWO PER CENT. (III) TIMBER OBTAINED UNDER A FOREST TWO AND ONE- LEASE HALF PER CENT. (IV) TIMBER OBTAINED BY ANY MODE OTHER TWO AND ONE- THAN UNDER A FOREST LEASE. HALF PER CENT. (V) ANY OTHER FOREST PRODUCE NOT BEING TWO AND ONE- TIMBER OR TENDU LEAVES HALF PER CENT. (VI) SCRAP ONE PER CENT:) 9. FROM THE ABOVE TABLE APPENDED BELOW SECTION 206C (1), ITEM NO.(VI) DEALS WITH SCRAP AND IT IS STIPULATED THAT EVERY PERSON , BEING A SELLER, SHALL, AT THE TIME OF DEBITING OF THE RECEIPT OF SUCH AMOUNT FROM THE SAID BUYER IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WH ICHEVER IS EARLIER, COLLECT FROM THE BUYER ONE PERCENT OF THE SALE CONSIDERATION AS INCOME-TAX AND PAY TO THE GOVERNMENT ACCOUNT. FOR THE PURPOSES OF SECTION 20 6C, THE WORD SCRAP IS DEFINED IN EXPLANATION (B) TO THAT SECTION WHICH IS EXTRACTED BELOW: EXPLANATION. FOR THE PURPOSES OF THIS SECTION.- (A) (I). (II) (B) SCRAP MEANS WASTE AND SCRAP FROM THE MANUFACT URE OR MECHANICAL WORKING OF MATERIALS WHICH IS DEFINITELY NOT USABLE AS SUCH BECAUSE OF BREAKAGE, CUTTING UP, WEAR AND OTHER REASONS. FROM A PLAIN READING OF THE EXPLANATION (B) TO SECT ION 206C WE UNDERSTAND THAT TO BIND AN ASSESSEE, WHO IS A DEALER IN SCRAP, THE SCRAP SOLD MUST BE (1) THE MATERIAL SHOULD BE WASTE; AND SCRAP ITA 11 67 TO 1170/RJT/2010. . A.YS.2 009-10 & 2010-11. 7 (2) THE MATERIAL SOLD SHOULD GENERATE FROM THE MAN UFACTURE OR MECHANICAL WORKING OF MATERIALS; (3) THE MATERIAL SOLD IS NOT USABLE AS SUCH BECAU SE OF BREAKAGE, CUTTING UP, WEAR AND OTHER REASONS. 10. IN OUR OPINION, TO SADDLE AN ASSESSEE WITH THE PROVISIONS OF SECTION 206C(1) READ WITH EXPLANATION (B), THE CONDITIONS E XPLAINED ABOVE FROM (1) TO (3) ABOVE HAVE NECESSARILY TO BE SATISFIED. THE CASE O F THE REVENUE IS THAT THE HEAD OF SECTION READS, PROFITS AND GAINS FROM THE BUSIN ESS OF TRADING IN ALCOHOLIC LIQUOR, FOREST PRODUCE, SCRAP, ETC. AND THEREFORE, THE ASSESSEE CANNOT ESCAPE FROM THE RIGORS OF PROVISIONS OF SECTION 206(1) OF THE ACT. WE ARE NOT INCLINED TO ACCEPT THIS PROPOSITION MADE OUT BY THE REVENUE. H AD IT BEEN THE INTENTION OF THE LEGISLATURE THAT EVERY SECTION HAS TO BE READ BY IT S HEADING ONLY, THEN THERE IS NO CASE FOR THE LEGISLATURE TO COME OUT WITH THE SECTI ONS, SUB SECTIONS, CLAUSES, EXPLANATIONS, ETC. THEREFORE, THE HEADING OF A PRO VISION IN THE ACT CANNOT OVERRIDE THE SECTION, ITS SUB SECTIONS, CLAUSE, EXP LANATIONS ETC. IN THE CASE ON HAND, THE WORD SCRAP IS ADEQUATELY EXPLAINED IN E XPLANATION (B) TO SECTION 206C WHICH, IN OUR OPINION, FOR THE DETAILED REASON S NARRATED ABOVE, EXONERATES THE ASSESSEES BEFORE US FROM THE AMBIT OF PROVISION S OF SECTION 206C(1) OF THE ACT. THE OTHER REASON ATTACHED BY THE CIT(A) WHILE UPHOLDING THE ORDER OF ASSESSING OFFICER IS THAT THE SCRAP SOLD BY THE ASS ESSEE WOULD HAVE BEEN COME OUT OF THE MANUFACTURING ACTIVITIES OR THE MECHANIC AL WORKING OF MATERIALS CARRIED OUT BY SOME OTHER MANUFACTURERS OR OTHERWISE ALSO. WE ARE AFRAID, THIS, AT THE BEST COULD MEET THE LOGICAL END ONLY. HAD IT BEEN THE CASE OF THE REVENUE, THERE WAS NO HITCH FOR THEM TO COME OUT WITH SUCH A CASE WITH CORROBORATIVE EVIDENCE. WHEN AN OPINION IS FORMED, IT IS IMPERATIVE THAT FI NDING IS SUPPORTED. IN THE CASES ON HAND, WE FIND THAT THE ASSESSEES EXPLAINED THAT SCRAP IMPORTED BY THEM IS DERIVED FROM DISMANTLING OF CONSTRUCTED RESIDENTIAL BUILDINGS, FACTORIES AND SUPERSTRUCTURE AND IT IS NOT GENERATED OUT OF ANY M ANUFACTURING PROCESS CARRIED OUT BY SOMEBODY. THE CIT(A) WHILE DRAWING A PRESUM PTION THAT THE SCRAP SOLD BY THE ASSESSEES MIGHT HAVE GENERATED OUT OF THE MA NUFACTURING ACTIVITIES OR ITA 11 67 TO 1170/RJT/2010. . A.YS.2 009-10 & 2010-11. 8 MECHANICAL WORKING OF MATERIALS CARRIED OUT BY SOME OTHER MANUFACTURERS IGNORED THE ABOVE EXPLANATION OF THE ASSESSEES. TH EREFORE, IN OUR OPINION, EXPLANATION OFFERED BY THE ASSESSEES REMAINS UNCONT ROVERTED AND IS WORTHY OF ACCEPTANCE. 11. IN VIEW OF THE ABOVE DISCUSSION WE HOLD THAT TO BIND A SELLER OF SCRAP UNDER THE PROVISIONS OF SECTION 206C(1) OF THE ACT IT IS IMPERATIVE THAT THREE CONDITIONS, THE DETAILS OF WHICH ARE GIVEN AT PARAGRAPH 9 OF TH IS ORDER WHICH ARE PROVIDED IN EXPLANATION (B) TO THAT SECTION MUST CONCURRENTLY B E SATISFIED. THE ASSESSEES ON HAND, THOUGH FOUND SOLD SCRAP BUT THE SCRAP SOLD IS NOT THE SCRAP AS DEFINED IN EXPLANATION (B) TO SECTION 206C OF THE ACT. THE SC RAP SOLD WAS NEITHER GENERATED FROM THE MANUFACTURE OR MECHANICAL WORKIN G OF MATERIALS NOR WAS THE SCRAP SOLD NOT USABLE AS SUCH. IN THIS VIEW OF THE MATTER WE HOLD THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ORDERS U/S 206C( 6) / 206C(7) OF THE ACT PASSED BY THE ASSESSING OFFICER DIRECTING THE ASSESSEES TO PAY RS. 3,17,214 & RS.7,93,430 EACH FOR THE ASSESSMENT YEARS 2009-10 A ND 2010-11. WE, THEREFORE, SET ASIDE THE ORDERS OF REVENUE AUTHORIT IES AND ALLOW APPEALS FILED BY THE ASSESSEE. 12. AS A RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. SIGNED AND PRONOUNCED TODAY IN THE OPEN COURT ON 17-06-2011. SD/- SD/- (N.R.S. GANESAN) ( A. L. GEHLOT) JUDICIAL MEMBER. ACCOUNTANT MEMBER. RAJKOT, DATED : 17-06-2011. PK/- COPY TO: 1. SHRI NATHULAL P. LAVTI.JAMNAGAR. 2. THE I.T.O.(TDS)-3, JAMNAGAR. 3. THE CIT(A)- RAJKOT. 4. THE C.I.T. BY ORDER 5. THE D.R., ITAT., RAJKOT. ASSTT.REGISTRAR, ITAT, RAJKOT