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TMI BlogCollection of income-tax at source during the financial year 1988-89-Profits and gains from the business of trading in alcoholic liquor, forest produce, etc.-Instructions regardingX X X X Extracts X X X X X X X X Extracts X X X X ..... has been felt in the past in assessing income of persons who take contracts for sale of liquor, forest produce, etc. It has been the Department's experience that for taking such contracts, firms or associations of persons are specifically constituted and very often no trace is left of them or their members after the contract has been executed. Persons have also been found to have taken contracts in "benami" names by floating undertakings or associations for short periods. Since tax is payable in the assessment years on the incomes of the previous years, the time by which the incomes from such sources become assessable, such persons become untraceable. Moreover, at the time of assessment years in these cases, either the accounts are not avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such goods chargeable to tax under the head "Profits and gains of business or profession"; (b) the right to receive any goods of the nature specified in column (2) of the Table below, or such goods as the case may be, a sum equal to the percentage specified in the corresponding entry in column (3) of the said Table of the amount paid or payable by the buyer in respect of the sale of such right or as the purchase price in respect of such goods shall be deemed to be the profits and gains of the buyer from the business of trading in such goods chargeable to tax under the head "Profits and gains of business or profession." Table Sl. No. Nature of goods Percentage (1) (2) (3) (i) Timber obtained under a forest lease Thirty-five per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-section (1) of section 44AC, at the point of first sale. The provisions of this section shall not apply to any buyer in the second or subsequent sale of such goods. This amendment will take effect from 1st April, 1989, and will accordingly apply to assessment year 1989-90 and subsequent years. "206C. (1) Every person, being a seller referred to in section 44AC, shall, at the time of debiting of the amount payable by the buyer referred to in that section 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 cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table below, a sum equal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt so collected on the production of the certificate furnished under sub-section (5) in the assessment made under this Act for the assessment year for which such income is assessable. (5) Every person collecting tax in accordance with the provisions of this section shall within ten days from the date of debit or receipt of the amount furnish to the buyer to whose account such amount is debited or from whom such payment is received, a certificate to the effect that tax has been collected, and specifying the sum so collected, the rate at which the tax has been collected and such other particulars as may be prescribed. (6) Any person responsible for collecting the tax who fails to collect the tax in accordance with the provisions of this sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from whom the tax had been collected and credit shall be given for such amount in the assessment made under the Income-tax Act on production of a certificate. This section also provides that if a seller does not collect or after collecting fails to pay the tax, he shall be deemed to be an assessee in default in respect of the tax and the amount of tax together with the amount of simple interest calculated at the rate of 2% per month or part thereof shall be a charge upon the assets of the seller. It may be noted that failure to pay the tax collected at source will attract the penal provisions of section 276BB according to which such a person will be punishable with rigorous imprisonment for a term between 3 months and 7 years and with fine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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