TaxTMI 
TaxTMI 
2017 (12) TMI 1129
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....common questions, stated to be the substantial questions of law: "[A] Whether the Appellate Tribunal has substantially erred in law and on facts in deleting the addition made of Rs. 1,30,85,783/u/ s. 206C(1) of the Income Tax Act on account of noncollection of TCS on sale of scrap and interest charged u/s.206C(C) in spite of the fact that the assessee was trader of scrap and the provision of section 206(1) was applicable to the assessee? [B] Whether the Appellate Tribunal has violated the Rule 46A(3) of the Income Tax Rule by not giving opportunity to the AO after admitting evidences in the form of photographs, samples?" 2. The assessment years are 2009-10, 2010-11, 2011-12 and 2012-13 and 2013-14, respectively. A survey came to be c....
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....ations and that the products manufactured by the assessee are classified under the Excise Laws under the Heads 63.09 and 63.10. During the course of the appeal proceedings, the Commissioner (Appeals) had also called for photographs and actual samples of the products manufactured by the assessee, and after perusing them, found that even though in common parlance what was being sold by the assessee could be held to be waste material, it was actually not so. The assessee was actually processing the imported garments to cut them into smaller pieces as per the requirements of various end users. The rags were even being further used for manufacturing knitwear, blankets, mattresses, pillows, etc. The chindis were being used for manufacture of bath....
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....section 206C of the Act, the assessee was liable to deduct tax at source on the sale of such scrap. It was submitted that the rags, wipers or chindi generated on account of cutting garments would clearly fall within the definition of "scrap" as defined under clause (b) of the Explanation to section 206C of the Act. It was further submitted that during the course of the appellate proceedings, the Commissioner (Appeals) had relied upon the additional evidence in the form of the photographs and samples produced by the assessee and no opportunity of hearing had been provided in that regard to the department in terms of rule 46 of the Income Tax Rules. It was, accordingly, urged that the appeals do give rise to substantial questions of law as pr....
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....Commissioner (Appeals) to the effect that the assessee was actually processing the imported garments to cut them into smaller pieces as per the requirements of various end users and the rags were being further used for manufacturing knitwear, blankets, mattresses, pillows, etc. and the chindis were being used for manufacturing bathroom mats, coasters, and similar items, while the industrial wipers were utilized for various industries for cleaning of hands and machinery, etc. during the manufacturing activity. It has further been found that the items brought into existence by the assessee were used as raw material for production of some other items and were definitely usable as such. The expression "scrap" as defined under clause (b) of the ....
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....n, there is no requirement in law that he should invariably consult/confront the Assessing Officer with such additional evidence. If the additional evidence furnished by the assessee before the first appellate authority is in the nature of clinching evidence leaving no further room for any doubt or controversy, in such a case no useful purpose would be served by forwarding such evidence/material to the Assessing Officer to obtain his report and in such exceptional circumstances, the said requirement can be dispensed with. In the facts and circumstances of the present case, the additional evidence was only in the nature of the photographs and samples of the articles manufactured by the assessee. In the opinion of this court, considering the ....