The ITO, TDS-3, JAMNAGAR V. M/s. Deep Recycling Industries, JAMNAGAR

ITA 643/RJT/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9054 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 20-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: ANKIT GOKANI
• Keywords: Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT (CONDUCTED THROUGH E - COURT AT AHMEDAB A D) BEFORE SHRI MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI MANISH BORAD , ACCOUNTANT MEMBER ./ ITA NO.643 - 644 / RJT/2012 / ASSTT. YEAR S : 2005 - 2006 AND 2006 - 07 ITO , TDS - 3, JAMNAGAR VS . M/S.DEEP RECYLING INDUSTRIES, PLOT NO.773, GIDC PHASE II, DARED, JAMNAGAR PAN: AADFD2991A (APPLICANT) (RESPONENT) REVENUE BY : SHRI AVINASH KUMAR, SR.DR ASSESSEE BY : SHRI ANKIT GOKANI, AR / DATE OF HEARING : 15 / 0 5 / 201 7 / DATE OF PRONOUNCEMENT: 16 / 05 /201 7 / O R D E R PER MANISH BORAD , ACCOUNTANT MEMBER : BOTH THE APPEALS OF REVENUE FOR A.Y S . 2005 - 2006 AND 2006 - 07 ARE DIRECTED AGAINST THE SEPARATE ORDER S OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) - I I, RAJKOT (IN SHORT, LD .CIT(A)) OF IDENTICAL DATED 03/09/2012 ARISING OU T OF ORDER S U/S.206C(6)/206C(7) OF THE INCOME TAX ACT,1961 (HEREIN AFTER RE FERRED TO AS ACT) FRAMED ON 08 /03 /2011 BY ITO,TDS - 3 , JAMNAGAR . 2. THE REVENUE HAS RAISED FOLLOWING COMMON GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ER RED IN LAW AS WELL AS FACTS OF THE CASE IN DELETING THE INTERE ST CHARGED U/S.206C(7) OF RS.28,799/ - INSPITE OF THE FACT THAT THE ASSESSEE WAS A TRADER OF SCRAP AND THE PROVISIONS OF SECTION 206C(1) APPLY TO THE ASSESSEE . ITA NO. 643 - 644 /RJT/2012 A.Y.2005 - 06 & 2006 - 07 2 2. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS FACTS IN OVERLOOKING THE HEAD NOTE OF SEC.206C, WHICH CLEARLY SPEAKS THAT HE TCS PROVISION U/S.206C ARE APPLICABLE NOT ONLY ON THE SCRAP GENERATED FROM THE ACTIVITY OF MANUFACTURING OR MECHANICAL WORKING OF MATERIAL BUT ALSO ON THE PROFITS AND GAINS FROM THE BUSINESS OF TRADE OF SCRAP. 3. THE LD.CIT (A) HAS ERRED IN LAW AS WELL AS FACTS IN DECIDING THE ABOVE ISSUES AGAINST THE DEPARTMENT AS THE HEAD NOTE DOES NOT PROVIDES THAT SUCH SCRAP SHOULD BE ARISEN FROM THE MANUFACTURE OF MECHANICAL WORKING OF THE ASSESSEE BUT PROVIDES THAT IT SHOULD BE ARISEN F ROM BUSINESS OR TRADE. 4. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE CBDT CIRCULAR DATED 21/05/2012 WHEREIN IT HAS BEEN CLARIFIED THAT THERE IS NO REQUIREMENT THAT THE GOODS TO BE ELIGIBLE FOR SCRAP SHOULD BE PRODUCED/MANUFACTU RED BY THE SELLER ITSELF (COPY ENCLOSED FOR KIND & READY REFERENCE) . 5. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE DEFINITION OF BUYER AND SELLER WHEREFROM IT IS CLEAR THAT THE PROVISIONS OF SEC.206C ARE ALSO APPLICABL E TO SCRAP TRADERS . 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE 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 THER EFORE, PRAYED 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. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND GOING THROUGH THE FACTS OF THE CASE, W E FIND THAT THE REVENUE HAS FILED THIS APPEAL ON 20 . 12 .2012 . ON 10.12.2015 THE CBDT HAS ISSUED INSTRUCTIONS BEARING NO. 21/2015 PROHIBITING IT S SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EF FECT, MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRESENT CASE, THE TAX EFFECT WOULD BE LESS THAN ITA NO. 643 - 644 /RJT/2012 A.Y.2005 - 06 & 2006 - 07 3 RS.10 LAKHS. THEREFORE, PRESENT APPEAL S DESERVES TO BE DISMISSED BEING TREATED TO BE FILED IN VIOLATION OF THE ABOVE C BDT INSTRUCTION. IT IS DISMISSED. 4 . IT IS FURTHER OBSERVED THAT ON RE - VERIFICATION AT THE END OF THE AO, IT CAME TO THE NOTICE THAT TAX EFFECT IS MORE OR IT FALLS WITHIN THE AMBIT OF EXCEPTION PROVIDED IN THE INSTRUCTION, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHIN LIMITATION PRESCRIBED UNDER THE LAW. 5 . IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 16 TH MAY , 201 7 AT AHMEDABAD. SD/ - SD/ - ( MAHAVIR PRASAD ) JUDICIAL MEMBER ( MANISH BORAD ) ACCOUNTANT MEMBER TRUE COPY AHMEDABAD; DATED 16 / 05 /201 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE . / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD