The ITO, TDS-1, RAJKOT-GUJARAT V. M/s. Shreeji Enterprise, RAJKOT-GUJARAT

ITA 638/RJT/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2353 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 17-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M J CHARANIA
• Keywords: Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BEN CH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI S. S. GO DARA, J.M.) I.T. A. NO. 638/RJT/2012 (ASSESSMENT YEAR: 2008-09) INCOME TAX OFFICER, TDS-1, RAJKOT VS. SHRI DHIRENDRA R. PREMNANI, PROP: M/S. SHREEJI ENTERPRISE, PLOT NO.27, AJI GIDC, RAJKOT (APPELLANT) (RESPONDENT) PAN: ACXPP9558P APPELLANT BY : SHRI M. J. CHARANIA, D.R. RESPONDENT BY : WRITTEN SUBMISSION DATE OF HEARING : 12-01-20 16 DATE OF PRONOUNCEMENT : 13-01-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-II, RAJKOT DATED 26.09.2012 FOR A.Y. 2008-09. 2. THE GROUND RAISED BY THE REVENUE IN THE PRESENT APP EAL READS AS UNDER:- 1. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN DELETING THE ADDITIONS MADE U/S. 206C(1) OF THE IT ACT ON ACCOUNT OF NON COLLEC TION OF TCS OF RS.6,22,648/- ON SALE OF SCRAP AMOUNTING TO RS. 6,22,64,864/- AND IN TEREST CHARGED U/S. 206C(7) OF RS. 2,52,172/-, INSPITE OF THE FACT THAT THE ASSESS EE WAS A TRADER OF SCRAP AND THE PROVISIONS OF SECTION 206C (1) APPLY TO THE ASSESSE E. ITA NO. 638 /RJT/2012 . A.Y. 2008-09 2 2. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN OVERLOOKING THE HEAD NOTE OF SEC. 206C, WHICH CLEARLY SPEAKS THAT THE TCS PRO VISIONS U/S. 206C ARE APPLICABLE NOT ONLY ON THE SCRAP GENERATED FROM THE ACTIVITY OF MANUFACTURING OR MECHANICAL WORKING OF MATERIALS BUT ALSO ON THE PRO FITS AND GAINS FROM THE BUSINESS OF TRADE OF SCRAP. 3. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FAC TS IN DECIDING THE ABOVE ISSUES AGAINST THE DEPARTMENT AS THE HEAD NOTE DOES NOT PR OVIDES THAT SUCH SCRAP SHOULD BE ARISEN FROM THE MANUFACTURE OR MECHANICAL WORKIN G OF THE ASSESSEE BUT PROVIDES THAT IT SHOULD BE ARISEN FROM BUSINESS OR TRADE. 4. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN NOT CONSIDERING THE CBDT CIRCULAR DATED 21/05/2012 WHEREIN IT HAS BEEN CLARI FIED THAT THERE IS NO REQUIREMENT THAT THE GOODS TO BE ELIGIBLE FOR SCRAP SHOULD BE PRODUCED/MANUFACTURED BY THE SELLER ITSELF (COPY EN CLOSED FOR KIND & READY REFERENCE) . 5. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS IN NOT CONSIDERING THE DEFINITION OF 'BUYER' AND 'SELLER' WHEREFROM IT IS CLEAR THAT THE PROVISIONS OF SEC. 206C ARE ALSO APPLICABLE TO SCRAP TRADERS. 6. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN DELETING THE ADDITIONS RELYING ON THE DECISION IN THE CASE OF NATHULAL LAV TI (ITA NO. 1167 & 1168/RJT/2010) AND HE HAS OVER LOOKED THE FACT THAT THE DEPARTMENT HAS ALREADY PREFERRED AN APPEAL AGAINST THIS DECISION BEFORE HO N'BLE HIGH COURT U/S. 260A OF THE IT ACT. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REV ENUE, WE FIND THAT REVENUE IS AGGRIEVED BY THE ADDITION OF RS.6,22,648 /-, THE TAX EFFECT OF WHICH IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10.12.2015 (CIRCULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF G IVEN BY LD. CIT(A) BEFORE THE INCOME TAX TRIBUNAL UNLESS THE TAX EFFECT, EXCL UDING INTEREST EXCEEDS RS. 10 LACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS. IN THE PRESENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE THE TAX EFFECT I S LESS THAN RS. 10 LACS, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTIONS OF THE ITA NO. 638 /RJT/2012 . A.Y. 2008-09 3 AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. IN SUCH CIRCUMSTANCES, WE DISMIS S THE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CAS E. 4. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13/01/2016 SD/- SD/- (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 13/01/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT