IN HIGH COURT OF DELHI AT NEW DELHI 3 ITA 475/2017 COMMISSIONER OF INCOME TAX-6 ..... Appellant Through: Mr. Rahul Chaudhary, Senior Standing Counsel versus MOKSHA SECURITIES (P) LTD. .....Respondent Through: None CORAM: JUSTICE S. MURALIDHAR JUSTICE PRATHIBA M. SINGH ORDER % 28.07.2017 CM 22511/2017 (delay) 1. delay of 58 days in re-filing appeal is condoned. application is disposed of. ITA 475/2017 2. This is appeal by Revenue against order dated 2nd September, 2016 passed by Income Tax Appellate Tribunal ( ITAT ) in ITA No. 6251/Del/2015 for Assessment Year ( AY ) 2005-06. 3.The Revenue is aggrieved by concurrent findings of Commissioner of Income Tax (Appeals) [ CIT (A) ] as well as ITAT deleting addition of Rs. 60 lakhs under Section 68 of Income Tax Act, 1961 ( Act ) and Rs. 60,000/- under Section 69C of Act. ITA 475/2017 Page 1 of 5 4. assessee filed its return of income for AY 2005-2006 on 31st March, 2006 declaring loss of Rs.19,44,961/-. case of Revenue is that it received information from Directorate of Investigation that Assessee had received accommodation entries of Rs.60 lakhs from Cubic Commercial Resources Ltd. ( CCRL ), paper company controlled by Mr. S. K. Gupta and others. 5. search and seizure operation was carried out on premises of Mr. S.K. Gupta and his associates. On basis of information gathered, AO initiated proceedings under Section 147 of Act against Assessee. During course of assessment proceedings, Assessee claimed to have received Rs. 60 lakhs from CCRL through account payee cheque in terms of Agreement to Sell dated 5th June, 2004. stand of Assessing Officer ( AO ) was that Assessee did not furnish any evidence regarding credit worthiness of CCRL. AO held that Assessee had failed to rebut admission by Mr. S.K. Gupta that he was providing accommodation entries to several beneficiaries including Assessee through group of paper companies controlled by him. Consequently, AO held that Rs. 60 lakhs, together with commission of Rs. 60,000/-, was to be treated as income of Assessee under Section 68 read with Section 69C of Act. 6. appeal filed by Assessee was allowed by CIT (A) by order dated 16th September, 2015. CIT (A) observed that although AO had addressed letters to bank with which CCRL was maintaining its accounts for concerned period, data collected was not mentioned in ITA 475/2017 Page 2 of 5 assessment order. Excepting above exercise, no other enquiry/verification was undertaken by AO to disprove claims of Assessee. It was noted that entire re-assessment proceedings was based on information provided by Mr. S. K. Gupta. 7. CIT (A) also accepted explanation offered by Assessee that it had received above sum from CCRL pursuant to agreement to sell. CIT (A) noted that since Assessee has produced copy of agreement to sell, onus has now shifted from Assessee to AO. However, AO has made no attempt to disprove agreement. directors of CCRL were not summoned by AO. No letter was issued to said company or its principal officers. AO did not ask Assessee to produce them either. 8. CIT (A) noted that entire addition was based on statement of Mr. S. K. Gupta. However, copy of sworn statement of Mr. S.K. Gupta was not given to Assessee. opportunity to cross-examine Mr S.K. Gupta, was also not provided. CIT (A) also noted that according to letter written on 30th March, 2012 by Assistant Commissioner of Income Tax to AO, one Mr. Aneja ji was conduit for accommodation entries. However, AO did not examine him or record his statement. 9. For aforementioned reasons, CIT (A) deleted additions. Aggrieved, Revenue went in appeal before ITAT. impugned passed by ITAT reveals that no one appeared on behalf of Revenue when appeal was taken up for hearing. ITAT was constrained to observe in paragraph 5 that notice having been issued to both parties, no ITA 475/2017 Page 3 of 5 representative of Department appeared nor filed any application for adjournment. Nevertheless, ITAT examined merit of case itself and confirmed finding of CIT (A) that additions made by AO were not justified. 10. Mr. Rahul Chaudhary, Senior Standing Counsel for Revenue, placed reliance on decision of Supreme Court in Sreelekha Banerjee v CIT (1963) 49 ITR 112 to urge that onus lay on Assessee to explain income from undisclosed sources. In present case that burden was not discharged by Assessee. According to him, CIT (A) failed to notice that AO had in fact conducted enquiry and it is Assessee who is unable to furnish satisfactory explanation for credit entries in his account. 11. Court is unable to agree with submissions of Mr. Chaudhary. order passed by CIT (A) is reasoned one. It correctly notes that once Assessee produced agreement to sell entered into with CCRP, onus shifted to AO to make further enquiry by summoning directors of CCRL to determine whether explanation offered by Assessee was tenable. As further noted by CIT (A), AO failed to furnish to Assessee copy of statement of Mr S. K. Gupta, which formed main basis for making additions. Mr Gupta was not even offered for cross-examination. 12. In considered view of Court, there is no legal infirmity either in order passed by CIT (A) or in impugned order passed by ITAT which confirmed same. ITA 475/2017 Page 4 of 5 13. No substantial question of law arises for consideration. appeal is accordingly dismissed. S. MURALIDHAR, J PRATHIBA M. SINGH, J JULY 28, 2017 rd ITA 475/2017 Page 5 of 5 Commissioner of Income-tax-6 v. Moksha Securities (P) Ltd