BHRAMARBAR SAHOO,BIJAYACHANDRAPUR vs. ITO,TDS, CUTTACK

That, the appellant has filed appeal before this Hon 'ble Tribunal wherein the appellant has challenged the legality of the order dtd.27.1 0.2022 passed by the Id. CIT(A).

That, the Id. CIT(A) while dismissing the appeal vide order dtd.27.10.2022 held that the assessing officer has not committed any error while assessing the appellant.

That, it is respectfully submitted .that the facts of the appellant is that the appellant is trader dealt with trading of scrap and finished goods and filed its return during the year under considerations.

That, the assessing authority while assessing the appellant held that the appellant is liable to pay penalty for not complying the provision of S- 206C(1A), (6A) & (7) of the IT Act.

That, both the forums failed to appreciate the facts 'that the appellant purchases the scrap from the various organizations situated at Paradeep and sale it after making it usable as finished product.

That, such facts were brought to the notice of the assessing authority while examining the books of account of the appellant during assessment. But, the Id. Assessing Officer has treated the sale of finished product as sale of scrap, as such the order of Id. AO is illegal and erroneous.

That, the Appellant for better appreciation of this Hon'ble Tribunal produces the month wise Sale Statement which were submitted before the Id. AO during the assessment. (Copy of the sale statement is annexed herewith as Annexure-I)

That, from the sale statement of the appellant, it is crystal clear that after purchasing the scrap from the subsequent sellers, the appellant has made sale being usable goods. Such as Rod, angle, channel, plate etc. to third parties.

That, appellant being a seller of usable goods qua finished goods, it is not liable to deduct TCS and have not violated the provision of S-206 of the IT Act.

That, the Id. AO and the CIT(A) wrongly interpreted the sale statement as if the appellant purchased the scrap and sold it as scrap to the other parties. But the fact is that such scrap being not salable as scrap, the appellant converting the scrap to finished goods, conducts its business throughout the period under consideration. In view of the facts and circumstances mentioned above, the appellant prays before this Tribunal to allow this appeal and quash the demand for which the appellant as in duty bound shall ever pray.

It was the submission that the item sold by the assessee are used as raw materials by the purchasers. It was the submission that though the assessee purchases scrap, what is sold by the assessee is after processing and, therefore, cannot be considered as scrap at all. It was the submission that the AO did not accept the contention of the assessee and non-collection of TCS (Tax Collected at Sources) levied tax u/s.206C of the Act. It was the submission that the levy as made by the AO and as confirmed by the ld. CIT(A) is liable to be deleted.

On this point, the ld.AR was asked to produce its balance sheet and the profit and loss account for the relevant assessment year. A perusal of the profit and loss account it was noticed that there is no expenditure in respect of any machinery much less any tools which are primary requirement of processing of any goods or raw material in the form of scrap into any finished goods which can be sold as usable products to third parties. The balance sheet and profit & loss account as provided by the ld. AR for the year ending 31.03.2015 is as follows :- ITA No.85&86/CTK/2023

In reply, ld. Sr. DR vehemently supported the order of the ld.CIT(A).

I have considered the rival submissions. Admittedly, a perusal of the balance sheet and profit & loss account of the assessee clearly shows that the assessee is not doing any processing of scrap purchased. It is an admitted fact by the assessee itself that the assessee is purchasing scrap. Thus, as the assessee is not doing any processing insofar as there is no plant & machinery involved and there is no wages nor are there any tools, it cannot be said that the assessee is doing any processing work to convert the scrap into any usable products. In these circumstances, it has to be held that the assessee is selling scrap as it is. A perusal of the Schedule-1, it is found that the same mainly contains trucks, godown shed, and other vehicles. These are nothing but transportation equipments. This being so, I find no error in the order of the ld. AO and ld.CIT(A) which calls for any interference in both the appeals of the assessee.

In the result, both appeals of the assessee are dismissed. Order dictated and pronounced in the open court on 20/10/2023. (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 20/10/2023 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant- Bhramarbar Sahoo, Proprietor of M/s B.B.Steel, At:Bijaychandrapur, Atharbanki, Jagatsinghpur 2. प्रत्यथी / The Respondent- ITO, TDS, Cuttack आयकर आयुक्त(अऩीऱ) / The CIT(A), 3. आयकर आयुक्त / CIT 4. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR,

ITAT, Cuttack गार्ज पाईऱ / Guard file. 6. आदेशानुसार/ BY ORDER, सत्यावऩत प्रयत //// (