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TMI Blog2015 (11) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal") in ITA No.2207/Ahd/2011 has been called in question by proposing the following questions, stated to be substantial questions of law:- "(A) Whether the Appellate Tribunal has substantially erred in law in interpreting the term Scrap as defined in clause (b) to Explanation to section 206C of the Income Tax Act by holding that the words 'waste and scrap' is a singular item and not distinct? (B) Whether the Appellate Tribunal has substantially erred in law in placing reliance upon the case of Navin Flourine Chemicals despite the fact that the Hon'ble Special Bench in the case of Bharti Auto Products had held that the words 'waste and scrap' are two different and distinct words? (C) Whether the Appellate Tribunal has substantially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch products may be commercially known as "scrap" they were definitely not "waste and scrap". He further agreed with the contention of the assessee that the items in question were usable as such and, therefore, do not fall within the definition of "scrap" as given in Explanation (b) to section 206C(1) of the Act. Placing reliance upon the decision of the Tribunal in the case of Navine Fluorine International Ltd. v. ACIT, TDS Circle Surat, the Commissioner (Appeals) ordered deletion of the demand of TCS on the said items. The revenue carried the matter in appeal before the Tribunal. The Tribunal in the impugned order has recorded the following findings:- "As per assessee, assessee has collected and paid TCS on following type of items of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itute sizeable chunk of production done by ship breakers. Though such products may be commercially known as "scrap" they are definitely not "waste and scrap". The items in question are "useable as such" and therefore does not fall within the definition of scrap as given in of section 206C(1). Having said so, we restore the issue to Assessing Officer with direction to grant relief to assessee under the provision of 206C(1) of Act, with regards to only sale of scrap arising out of manufacturing activity in course of ship breaking after providing due opportunity of hearing to assessee." 3. Mrs. Mauna Bhatt, learned senior standing counsel for the appellant assailed the impugned order by submitting that the interpretation put by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the TCS on four items as reflected in the order of the Tribunal. It was submitted that the Tribunal has given a finding that the assessee would be entitled to the relief under the provisions of section 206C (1) of the Act only with regard to sale of scrap arising out of manufacturing activity in the course of ship breaking and, therefore, the Tribunal has rightly interpreted the expression "scrap" as defined under the Act and that the impugned order being just, legal and proper deserves to be confirmed. 4.1 In support of his submission, the learned counsel placed reliance upon the decision of the Madras High Court in the case of Commissioner of Income tax v. Adisankara Spinning Mills (P.) Ltd., (2014) 362 ITR 233 (Mad), wherein the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C of the Act bears the heading, "Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap etc." and provides that every person, being a seller shall, at the time of debiting of the amount payable by the buyer 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 to the percentage specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax. The nature of goods specified at serial No.(vi) is scrap, and the percentage provided is 1%. The expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entially, therefore, the impugned order of the Tribunal is based upon a finding of fact which does not give rise to any question of law. 9. Insofar as the course of action adopted by the Tribunal in remitting the matter to the Assessing Officer to decide in relation to which of the items the assessee is entitled to relief under the provisions of section 206C(1) of the Act is concerned, no fault can be found in the approach adopted by the Tribunal, inasmuch as, out of the four items of which tax was not collected at source, the matter has merely been referred to the Assessing Officer for the purpose of examining as to what extent relief is required to be granted to the assessee under the provisions of section 206C(1) of the Act having regar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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