2016 (12) TMI 506

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.... Advocate For The Respondent : Mr. Denesh Goyal, Advocate, Ms. Radhika Suri, Senior Advocate, with Ms. Rinku Dahiya, Advocate S.J. VAZIFDAR, C.J. (ORAL) The petitioners seek a writ of certiorari to quash a clarification dated 16.08.2016 issued by respondent No. 2 - Deputy Commissioner of Income Tax (TDS), Ludhiana stating that cotton waste is scrap within the meaning of the term under Sec....

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.... waste. Section 206C(1) in so far as it is relevant reads as under:- "206C. Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap etc. - (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 cheq....

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....ondent No. 3 sought a clarification in this regard from the department. Initially, a clarification was issued on 24.05.2016 stating that cotton waste is not covered under the definition of scrap contained in Section 206C(1) read with explanation (b). By a further communication dated 29.06.2016, the department stated as under:- "Keeping in view the judgements and findings of the authorities (sup....

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....reof would apply. The communication states that the judgement of the Madras High Court in the case of The Commissioner of Income Tax Ward-1(3), Coimbatore Vs M/s Adisankara Spinning Mills (P) Ltd. (Madras) has not been accepted by the department. The statement that the matter is pending before the Supreme Court is, however, admittedly incorrect. The matter referred to does not concern this issue. ....