TaxTMI 
TaxTMI 
2018 (4) TMI 1961
X X X X Extracts X X X X
X X X X Extracts X X X X
....urat (in short "the AO") under section 201(1) & 201(1A) of Income Tax Act,1961 ( in short 'the Act'). 2. Ground no. 1 to 3 relates to levying tax of Rs. 50,960 under section 201(1) and interest of Rs. 36,690 under section 201(1A) by treating the assessee company in default for failure to collection of tax at source under section 206C of the Act on the sale of material as scrap even though it is not scrap within the meaning of explanation given below to section 206C of the Act. 3. Short facts are that the assessee has sold scrap material of Rs. amounting to Rs. 49,47,622 without deducting tax deducted at source as required under section 206C of the Act. The AO after examining the sale vouchers of scrap to Shree Ambica Trading Co. and Visha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ditions must be satisfied for making liable the seller for collection of tax at source which are 1. The material should be waste 2. The material sold should be generated from manufacture or mechanical working material 3 the material sold is not re usable as such because of breakage, cutting up, wear and other reason. Therefore, it was argued that the assessee has sold various items consisted of plastic carabs, teens old weigh, scale , empty packages, old tyres , bullock carts , barrels which are of any stretch of imagination cannot be said as generated from manufacturing process of sugar and its by products. The ld. A.R. also placed reliance on the decision of Hon'ble Gujarat High Court in the case of CIT(TDS) v. Priya Blue Industries Pvt. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... other reasons. In the above definition the important words used in the definition of scrap are "waste and scrap" - "from manufacture" and "which is". The word "waste and scrap" are one item. Thereafter, the word used is "from" the manufacture or mechanical working of material. It would mean that the waste and scrap being one item should arise from the manufacture or mechanical working of material. It is, therefore, necessary to read the words waste and scrap together which are generated out of manufacturing process of the assessee. The words waste and scrap should have nexus with the manufacturing or mechanical working of material. Thereafter, the word used is "which is" definitely not usable. The word "is" as used in this definition of th....