Case Law Details
Tamil Nadu State Marketing Corporation Ltd. Vs DCIT (Madras High Court)
Summary: In a judgment regarding Tamil Nadu State Marketing Corporation Ltd. vs. DCIT, the Madras High Court ruled that the mere opening, breaking, or uncorking of a liquor bottle, even if done by twisting the seal, does not qualify as the generation of “scrap” from the “mechanical working of material.” The court emphasized that Section 206C of the Income Tax Act, 1961, which deals with the collection of tax at source, applies to waste or scrap resulting from manufacturing or mechanical working of materials. In this case, the court concluded that the activity of opening or uncorking bottles by consumers in licensed premises does not constitute “mechanical working of material” and, therefore, the provisions of Section 206C are not applicable.
Key Points:
- Section 206C of the Income Tax Act, 1961 mandates sellers to collect tax at source from buyers of specified goods.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
