Sec. 206C of Income Tax Act, 1961—Collection of tax at source—The CIT(A) has erred on facts and in law in upholding the business activity of trading in ferrous and non-ferrous metals carried on by the appellant firm, as an activity of sale of scrap, as defined in section 206C(1) of the I.T. Act, 1961, thereby wrongfully treating the appellant as an assessee in default for not collecting TCS @ 1 % on the entire sale proceeds made by the appellant firm.
Held that:-Hon'ble Gujarat High Court decision in ‘CIT(TDS) vs. M/s Priya Blue Industries Pvt. Ltd.’ (supra), decided the matter in favour of the assessee, holding as follows:“9. If the facts of the case in hand are considered in the light of the decision of the Hon'ble Jurisdictional High Court (supra), we find that the items sold by the assessee do not fit into the category of scrap as explained by the Hon'ble High Court (supra). Therefore, in our considered opinion, the assessee cannot be treated as an assessee in default and on the impugned sales cannot be treated as sale of scrap thereby making the assessee out of the purview of Section 206C of the Act." In this view of the matter, respectfully following ‘CIT(TDS) vs. M/s Priya Blue Industries Pvt. Ltd.’ (supra), we decide the grounds of appeals taken by the assessee in favour of the assessee.LALA BHARAT LAL vs. ITO.[2020] 78 ITR (TRIB) 451 (ITAT-LUCKNOW)