2020 (7) TMI 438

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....confirming the order passed U/s 206C(6A)/206C(7) by Income-tax Officer TDS, Ajmer. 2. None appeared on behalf of the assessee however, the assessee has submitted a letter dated 22-1-2020 which is on record along with written submission and requested that the appeal of the assessee may be decided by considering the written submission of the assessee. 3. The hearing of this appeal was concluded through video conference in view of the prevailing situation of COVId-19 pandemic. The assessee is dealing in scraped material and has purchased railway scrap in auction which was subjected to TCS U/s 206C(1) of the Act. The Railway while receiving the payment from the assessee has also collected tax at source. The assessee sold the scrap to vari....

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....w iron goods. The trading in all iron goods mainly consist of old material purchased from the railway. The sales have been made by the assessee to other traders and sellers. The assessee has contended that since the material purchased by the assessee from the railway in the auction is not generated in the manufacturer or mechanical working process and therefore, does not fall in the definition of scrape as in provided clause-(b) of explanation to Section 206C of the Act. Hence, the assessee has contended that the provisions of Section 206C are not applicable. In support of his contention, he has relied upon the decision of Hon'ble Gujarat High Court in case of Priya Blue Industries (P) Ltd. 381 ITR 210 as well as decision of Ahmedabad B....

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....ee then the assessee cannot reclassify goods at the time of sale of the said scrap purchase from the railway. She has relied upon the order of the authorities below. 6. We have considered the written submissions as submitted by the assessee and arguments of ld. DR. We have also carefully perused the order passed U/s 206C(6A)/(7) of the IT Act. There is no dispute that the assessee purchased scrap material from the railways which was subjected to TCS and the said material was again sold by the assessee to various parties who were stated to be traders as well as consumers of the scraped without collecting the tax at source by the assessee. Therefore, the AO initiated the proceedings for holding the assessee in default U/s 206C(6A)/(7) of t....