DCIT CENTRAL CIRCLE 2(1), CHENAI vs. C.VIJAYA BASKAR, PUDUKOTTAI

ITA 696/CHNY/2023Status: DisposedITAT Chennai28 February 2025AY 2012-13113 pages
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What did the Tribunal hold?

The Tribunal addressed the legal grounds raised by the Assessee first. It rejected the challenge to the Section 127 order as administrative and not appealable. Regarding the approval under Section 153D, the Tribunal found that the AO had submitted proposals with documents, and the approval was given after prima facie satisfaction, following due procedure. It held that detailed findings on each document were not necessary for a valid approval. On the issue of DIN, the Tribunal noted that the matter was sub-judice before the Supreme Court and refrained from adjudicating, keeping the legal grounds open for future adjudication in light of the Apex Court's final decision. The Tribunal then dealt with the substantive issues. For AYs 2011-12 & 2012-13, the Revenue's appeals concerning quarry expenses and unaccounted sales were dismissed. For AYs 2013-14 & 2014-15, the Revenue's appeal on quarry expenses was dismissed. For AY 2015-16, the Revenue's appeals on quarry expenses, unaccounted sales, and undisclosed receipts were dismissed. For AY 2016-17, the Revenue's appeals on quarry expenses and undisclosed receipts were dismissed, and the Assessee's appeal on quarry expenses was also dismissed. For AY 2017-18, the Revenue's appeals on quarry expenses, undisclosed receipts, undisclosed closing stock, and undisclosed expenses were dismissed, and the Assessee's appeal on quarry expenses was dismissed. For AY 2018-19, the Revenue's appeals on quarry expenses, unexplained cash found, and alleged unexplained cash mobilized were dismissed, and the Assessee's appeal on quarry expenses was rejected. However, the Assessee's appeal concerning unexplained cash mobilized by the assessee was allowed. Consequently, some appeals were dismissed, and one was partly allowed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Chennai Bench, heard appeals filed by the Revenue for Assessment Years (AY) 2011-12 to 2018-19 and by the Assessee for AYs 2016-17 to 2018-19. These appeals stemmed from a common order dated 31.03.2023 by the Commissioner of Income Tax (Appeals)-19, Chennai, concerning assessments framed by the Assessing Officer (AO) under Section 143(3) read with Sections 153A & 153C of the Act on 27.09.2021. The Assessee, Shri C. Vijayabaskar, is engaged in the production and sale of blue metals through his proprietorship concern, M/s Rasi Blue Metals. The rough stones for this production were sourced from quarries held in the names of Shri S.A. Subbiah and Shri B. Kubendran, to whom the Assessee had leased quarry land. The AO had made additions for quarry expenses and unaccounted sales of blue metals.

What were the issues?

1. Whether the CIT(A) erred in restricting the disallowance of quarry expenses of Rs.1,12,04,385/- to 30% instead of confirming the entire disallowance made by the AO, considering the alleged lack of means of the license holders, absence of evidence for expenses, and failure to bifurcate excavation costs from stone valuation. (Section 143(3) r.w.s 153A & 153C) 2. Whether the CIT(A) erred in deleting the addition of Rs.12,82,67,697/- towards unaccounted sale of blue metals and directing a recalculation based on excess excavation, treating 40% Gross Profit (GP) as undisclosed income, when the AO had relied on aerial photogrammetric methods and the Assessee failed to maintain proper records. (Section 143(3) r.w.s 153A & 153C) 3. Whether the CIT(A) erred in deleting additions, holding they were made without reference to incriminating materials in unabated assessments. (Section 143(3) r.w.s 153A & 153C) Assessee's Contentions: - The AO's jurisdiction was challenged on legal grounds. - Approval orders under Section 153D were passed without application of mind and without a computer-generated Document Identification Number (DIN), rendering them invalid as per CBDT Circular No. 19 of 2019 and various High Court decisions. Revenue's Contentions: - The CIT(A) erred in restricting quarry expense disallowance and deleting additions for unaccounted sales. - The quarry license holders were mere name lenders. - The Assessee failed to provide verifiable accounts for quarry expenses and rough stone purchases. - The CIT(A) erred in relying on State Government inspection reports over the Valuation Cell's findings. - The gross profit theory was not applicable as excavation expenses were already claimed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153A,Section 153C,Section 153D,Section 127

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Cases cited in this judgment(7)Show list

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Heard together (9 matters)

ITA No.695/Chny/2023
ITA No.696/Chny/2023
ITA No.697/Chny/2023
ITA No.698/Chny/2023
ITA No.699/Chny/2023
ITA No.700/Chny/2023
ITA No.701/Chny/2023
ITA No.702/Chny/2023
ITA No.589/Chny/2023

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपीलीय अधिकरण “ए” ायपीठ चेई म। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI माननीय ी मनोज कु मार अवाल ,लेखा सद# एवं माननीय ी मनु कु मार िग&र, ाियक सद# के सम'। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM

1.

आयकरअपील सं. / ITA No.695/Chny/2023 (िनधा(रणवष( / Assessment Year: 2011-12) & 2. आयकरअपील सं. / ITA No.696/Chny/2023 (िनधा(रणवष( / Assessment Year: 2012-13) & 3. आयकरअपील सं. / ITA No.697/Chny/2023 (िनधा(रणवष( / Assessment Year: 2013-14) & 4. आयकरअपील सं. / ITA No.698/Chny/2023 (िनधा(रणवष( / Assessment Year: 2014-15) & 5. आयकरअपील सं. / ITA No.699/Chny/2023 (िनधा(रणवष( / Assessment Year: 2015-16) & 6. आयकरअपील सं. / ITA No.700/Chny/2023 (िनधा(रणवष( / Assessment Year: 2016-17) & 7. आयकरअपील सं. / ITA No.701/Chny/2023 (िनधा(रणवष( / Assessment Year: 2017-18) & 8. आयकरअपील सं. / ITA No.702/Chny/2023 (िनधा(रणवष( / Assessment Year: 2018-19) DCIT Central Circle-2(1) Chennai. बनाम/ Vs. Shri C. Vijayabaskar #14/28-1, Sowrastra Street, Illupur, Pudukottai-622 102. 2 थायीलेखासं./जीआइआरसं./PAN/GIR No. ACPPV-4888-A (अपीलाथ/Assessee) : ( थ / Respondent) & 9.आयकरअपील सं. / ITA No.589/Chny/2023 (िनधा(रणवष( / Assessment Year:

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