Smt. Manjari, V. ITO,

ITA 101/BANG/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8620 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-01-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 22-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMALADHAR SD
• Assessee Lawyers: GURUSWAMY ITP
• Keywords: Gift; Income from undisclosed sources; Revised return
• Section: 143(3); 133A; 69; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.101/B/2014 ASSESSMENT YEAR : 2004-05 SMT. MANJARI, PENTHOUSE, BILDEN PARK, I CROSS, G. M. PALYA, NEW THIPPASANDRA, BENGALURU-560075. PAN : AHOPM2199R VS. INCOME TAX OFFICER, WARD-7(1), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. GURUSWAMY, ITP REVENUE BY : SHRI. KAMALADHAR, SD. COUNSEL DATE OF HEARING : 18.1.2017 DATE OF PRONOUNCEMENT : 20.1.2017 O R D E R PER GEORGE GEORGE, JUDICIAL MEMBER THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF THE CIT (A) LTU, BANGALORE, DATED 28.10.20 13. THE RELEVANT ASSESSMENT YEAR IS 2004-05. ITA NO. 101/B/2014 PAGE 2 OF 11 2. THE ASSESSEE HAS, IN HER GROUNDS OF APPEAL, RAIS ED THE FOLLOWING TWO GROUNDS, NAMELY: (1) THAT THE CIT (A)LTU HAD ERRED IN CONFIRMING A N ADDITION OF RS.8,40,000/- BEING THE AMOUNT OF CASH GIFT WITHOUT APPRECIATING THE DOCUMENTARY EVIDENCE IN SUPPORT OF SOURCE OF CASH GIFTS; & (2) THAT THE CIT (A) LTU HAD ERRED IN CONFIRMING AN ADDITION OF RS.6.8 LAKHS MADE BY THE AO ON PROTECTIVE BASIS WIT HOUT APPRECIATING THE FACT THAT THE SAID AMOUNT WAS NOT A SUBJECT MATTER OF REVISION PROCEEDINGS OR APPELLATE PROCEEDINGS FOR THE AY 2004-05. 3. THE FACTS OF THE ISSUES, IN BRIEF, ARE AS FOLLOW S: THE ASSESSEE, AN INDIVIDUAL, HAD FILED HER ORIGINA L RETURN OF INCOME, ADMITTING A TOTAL INCOME OF RS..1,07,780/- FOR THE ASSESSMENT YEAR UNDER DISPUTE. THERE WAS AN OPERATION U/S 133A OF THE AC T IN THE CASE OF M/S. BILDEN DEVELOPERS IN WHICH THE ASSESSEE WAS A PARTNER. SUBSEQUENTLY, THE ASSESSEE HAD FURNISHED A REVISED RETURN OF INCOME, ADMITTING AN INCOME OF RS.3,17,780/-. THE ORIGINAL ASSESSMENT WAS CONCLUDED U/S 143(3) OF THE ACT, ACCEPTING THE REVI SED INCOME OF RS.3.17 LAKHS. 3.1. SUBSEQUENTLY, THE JURISDICTIONAL CIT INITIATED PROCEEDINGS U/S 263 OF THE ACT WHEREBY SET-ASIDE THE ASSESSMENT WITH A DIR ECTION TO THE AO TO EXAMINE THE SOURCE OF LOAN AMOUNT OF RS.15.2 LAKHS SECURED BY THE ASSESSEE FROM HER TWO MINOR DAUGHTERS. ON AN APPEA L OF THE ASSESSEE, THE EARLIER BENCH OF THIS TRIBUNAL VIDE ITS FINDING S DATED 25.02.2009 DIRECTED ITA NO. 101/B/2014 PAGE 3 OF 11 THE CIT, B-III TO PROVIDE AN OPPORTUNITY TO THE ASS ESSEE OF BEING HEARD. ACCORDINGLY, THE CIT, B-III VIDE HIS ORDER U/S 263 OF THE ACT DATED 31.8.2009 HELD THAT THE ASSESSMENT IN QUESTION WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND, THUS, DIRECTED THE AO TO EXAMINE THE SOURCE OF LOANS ETC. 3.2. AGGRIEVED, THE ASSESSEE HAD AGAIN TOOK UP THE ISSUE WITH THE EARLIER BENCH OF THIS TRIBUNAL WHICH IN ITS FINDINGS DATED 26.07.2010 DISMISSED THE ASSESSEES APPEAL WITH AN OBSERVATION THAT THE ORDE R OF THE CIT U/S 263 OF THE ACT WAS IN ACCORDANCE WITH LAW. CONSEQUENT UPO N THE FINDINGS OF THE EARLIER BENCH (SUPRA), THE AO INITIATED RE-ASSESSME NT PROCEEDINGS. DURING THE COURSE OF THE SAID PROCEEDINGS, THE ASSESSEE HA D PRODUCED THE GRANDMOTHER (THE DONOR) OF THE MINOR DAUGHTERS OF T HE ASSSESSEE BEFORE THE AO ALONG WITH AN AFFIDAVIT DATED 25.11.2010 SWO RN BY THE DONOR [THE GRANDMOTHER] CONFIRMING THE GIFTS MADE. DURING THE DEPOSITION ALSO, THE DONOR HAD CONFIRMED THE GIFTS MADE WITH THE CONFIRM ATION LETTER FOR GIFTS AND SOURCE THEREOF. ACCORDING TO THE ASSESSEE, THE SOU RCE WAS BEING AGRICULTURAL INCOME AND SALE PROCEEDS OF AGRICULTUR AL LANDS. WHEN SHE WAS AGAIN CALLED UPON BY THE AO TO DEPOSE, THE DONOR, A CCORDING TO THE ASSESSEE, WAS IN HER ADVANCED AGE, COULD NOT APPEAR BEFORE THE AO, INSTEAD, FILED AN AFFIDAVIT DATED 25.11.2010 AFFIRM ING THAT THE GIFT WAS REVOKED TO MITIGATE THE HARDSHIPS OF THE ASSESSEE A S WELL AS THE MINOR CHILDREN. SUBSEQUENTLY, THE DONOR AGAIN APPEARED B EFORE THE AO AND, ITA NO. 101/B/2014 PAGE 4 OF 11 ACCORDING TO THE ASSESSEE, CATEGORICALLY DEPOSED/CO NFIRMED THE GIFTS SO MADE. HOWEVER, THE AO TOOK A STAND THAT NO DOCUMEN TARY EVIDENCE WAS PRODUCED AND, ACCORDINGLY, CONCLUDED THE ASSESSMENT . 3.3. AGGRIEVED, THE ASSESSEE HAD PREFERRED AN APPEA L BEFORE THE CIT(A)-III ON 31.1.2011 WHICH WAS SUBSEQUENTLY CAME UP FOR HEARING BEFORE THE CIT (A)-LTU WHO IN HIS ORDER DATED 28.10 .2013, DISMISSED THE APPEAL OF THE ASSESSEE FOR THE FOLLOWING GROUNDS, N AMELY: (A) THE ASSESSEE HAD FAILED TO PRODUCE THE REGISTER ED SALE DEEDS IN RESPECT OF THE AGRICULTURAL LANDS AGREED TO BE SOLD VIDE SALE AGREEMENT DATED 6.2.2003 FOR TRANSFER OF 15 ACRES O F LAND FOR A CONSIDERATION OF RS.28.5 LAKHS AGAINST WHICH ADVANC E OF RS.14 LAKHS WAS RECEIVED AND ANOTHER AGREEMENT DT.22.5.2003 FOR TRANSFER OF 13.5 ACRES OF LAND FOR A CONSIDERATION OF RS.36.58 LAKHS AGAINST WHICH ADVANCE OF RS.1 LAKH WAS RECEIVED; (B) THE ASSESSEES BANK ACCOUNTS MAINTAINED IN NELL UR AND BANGALORE WERE NOT FURNISHED; (C) THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT BY THE DONORS IN RESPECT OF THE AGRICULTURAL INCOME; & (D) THE DONOR HAD REVOKED THE GIFT ON 11.12.2010 AN D THE GIFTED AMOUNT WAS RECEIVED BACK FROM THE ASSESSEE THROUGH AN ACCO UNT PAYEE CHEQUE, BUT, THE SAME HAS NOT BEEN ENCASHED TILL T HE DATE OF APPELLATE ORDER ETC.,, 3.4. AGGRIEVED, BY THE REASONING OF THE CIT (A)-LTU , THE ASSESSEE HAS NOW COME UP BEFORE US WITH THE PRESENT APPEAL. DURING THE COURSE OF HEARING, THE SUBMISSIONS MADE BY THE LEARNED COUNSE L FOR THE ASSESSEE ARE SUMMARIZED AS UNDER: - THAT THOUGH THE CIT (A) HAD EXAMINED THE SALE DEE DS DATED 6.2.2003 AND 22.5.2003 AND SALE AGREEMENT DT.6.2.20 03, ACCORDING ITA NO. 101/B/2014 PAGE 5 OF 11 TO WHICH ADVANCES OF RS.14 LAKHS AND RS.1 LAKH RECE IVED BY THE DONORS WHICH WAS NOT DISPUTED BY HIM, BUT, DISMISSE D THE APPEAL FOR NON-PRODUCTION OF SALE DEEDS; - THAT THE CIT (A) HAD NOT APPRECIATED THE FACT OF EXECUTION OF SALE DEED WHICH WAS NOT A RELEVANT FACTOR SINCE THE ISSU E BEFORE HIM WAS RELATED TO THE CAPABILITY OF THE DONORS TO GIFT THE AMOUNT OF RS.15.2. LAKHS TO THE MINOR CHILDREN IN THE ASSESSMENT YEAR S 2003-04 AND 2004-05; - THAT THE CIT (A) HAD FAILED TO APPRECIATE THAT TH E GIFTS WERE MADE IN CASH AND AS SUCH, NON-PRODUCTION OF COPIES OF BANK ACCOUNTS WAS NOT AN ISSUE BEFORE HIM; - THAT THE DONATION OF GIFTS WAS ONLY FROM THE INCO ME OF AGRICULTURAL LAND AND, THEREFORE, NO BOOKS OF ACCOUNT WERE MAINT AINED AS THE DONORS WERE NON-ASSESSEES; - THAT THE REVOCATION OF THE GIFT AND RECEIPT OF TH E GIFTED AMOUNT BY ONE OF THE DONORS FROM THE ASSESSEE WAS NOT A RELEV ANT FACTOR TO ADJUDICATE THE GENUINENESS OF THE GIFT SINCE IT WAS A LATER DEVELOPMENT WHICH CANNOT HAVE ANY BEARING ON THE EV ENTS OF EARLIER YEARS; AND THAT THE SUBJECT MATTER OF APPEALS AS ON 31.3.2004 AND, THEREFORE, THE REVOCATION OF GIFT ON 11.12.2010 CAN NOT ASSUME ANY SIGNIFICANCE FOR ADJUDICATING THE ISSUE OF GIFT; - THAT THE GIFTS WERE RECEIVED IN TWO SEPARATE FINA NCIAL YEARS I.E., 2002-03 AND 2003-04 RELEVANT TO THE AYS 2003-04 AND 2004-05. THE CASH GIFTS OF RS.6.8 LAKHS AND RS.8.4 LAKHS RE CEIVED BY BOTH THE MINOR CHILDREN WERE FOR THE A.YS 2003.04 AND 2004- 05 RESPECTIVELY. THE AGGREGATE GIFTS AMOUNTING TO RS.15.2 LAKHS, OUT OF WHICH, THE ASSESSEE HAD SHOWN THE LOANS RECEIVED FROM THE MINO R CHILDREN AT RS.6.8 LAKHS AND RS.8.4 LAKHS FOR THE AYS 2003-04 A ND 2004-05 RESPECTIVELY. THE AGGREGATE LOAN AMOUNTING TO RS.1 5.2 LAKHS RELATING TO AYS 2003-04 AND 04-05 WAS SHOWN SEPARAT ELY AS LIABILITY PAYABLE TO THE MINOR CHILDREN IN THE RESPECTIVE ASS ESSMENT YEARS AS PER THE RETURNS OF INCOME, HOWEVER, THE AO TOOK A S TAND THAT A SUM OF RS.8.4 LAKHS AS ADMITTED TRANSACTIONS PERTAINING TO THE AY 2004- 05, BUT, THE GENUINENESS OF SUCH TRANSACTION WAS NO T ESTABLISHED, THE SAME WAS BROUGHT TO TAX IN THE AY UNDER DISPUTE . 3.5. IN CONCLUSION, IT WAS SUBMITTED THAT THE GIF TS MADE BY SMT. SULOCHANAMMA AND LATE VENKSATESHA REDDY - THE GRANDPARENTS TO ITA NO. 101/B/2014 PAGE 6 OF 11 THEIR GRANDCHILD [MS.PRADYUTHA], AGGREGATING TO RS. 8.4 LAKHS WAS OUT OF AGRICULTURAL INCOME AND SALE PROCEEDS OF AGRICULTUR AL LANDS DURING THE RELEVANT ASSESSMENT YEAR UNDER DISPUTE, TO SUBSTAN TIATE THEIR CLAIM, THE GRANDMOTHER HAD FURNISHED CONFIRMATION LETTERS OF G IFT AND SOURCE THEREOF. IT WAS, THEREFORE, PLEADED THAT THE ASSESSING OFFIC ER BE DIRECTED TO DELETE THE ADDITION OF RS.8.40,000/- MADE UNDER THE HEAD INCOME FROM OTHER SOURCES ON SUBSTANTIVE BASIS. 3.6. ON THE OTHER HAND, THE LEARNED DR PLEADED TH AT THE STAND OF THE AUTHORITIES BELOW ARE IN ACCORDANCE WITH THE PROVIS IONS OF THE ACT AND, THERE WAS NO INFIRMITY WHICH REQUIRES ANY INTERVENT ION BY THE TRIBUNAL. IN ESSENCE, THE LEARNED DR URGED THAT THE APPEAL OF TH E ASSESSEE DESERVE TO BE DISMISSED. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS, PERUSED THE RELEVANT MATERIALS ON RECORD, THE FINDINGS OF THE E ARLIER BENCHES OF THIS TRIBUNAL AND ALSO THE DOCUMENTARY EVIDENCES PRODUCE D BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE FORM OF A PAPER BOO K. 4.1. AS COULD BE SEEN FROM THE ASSESSMENT ORDER, TH E SURVIVING DONOR WAS REQUIRED TO FURNISH DOCUMENTARY EVIDENCE IN SU PPORT OF THE CLAIM THAT THE DONATION WAS MADE TO HER GRANDDAUGHTER. SMT. SULOCHANAMMA [AGED 70 YEARS], THE SURVIVING DONOR HAD FURNISHED AN AFF IDAVIT SOLEMNLY AFFIRMING ITA NO. 101/B/2014 PAGE 7 OF 11 THAT THE CONFIRMATION LETTERS OF THE GIFT HAD ALREA DY BEEN PRODUCED IN THE COURSE OF EARLIER PROCEEDINGS. ACCORDING TO THE AO , THE AFFIDAVIT ALSO AVERRED THAT THE GIFT WAS MADE PARTLY OUT OF AGRICU LTURAL INCOME AND PARTLY OUT OF SALE PROCEEDS OF THE LANDS. SWORN STATEMENT OF SMT SULOCHANAMMA ON OATH WAS RECORDED BY THE AO ON 23.12.2010 IN WHI CH, SHE AFFIRMED THAT DURING THE LIFT TIME OF MY LATE HUSBAND BOTH MY HU SBAND AND MYSELF HAVE GIVEN GIFTS TO MY GRAND CHILDREN NAMELY PRADYUTHA & REETU OF AROUND RS.15 LAKHS FROM THE SALE PROCEEDS OF OUR AGRICULTU RAL LANDS CONSISTING OF AROUND 30 ACRES SITUATED IN AND AROUND GANDAVARAM V ILLAGE WHICH IS 16 KMS AWAY FROM NELLORE TOWN, AP. THE SAID LANDS WER E SOLD IN STAGES OVER A PERIOD OF TIME AT AROUND RS.1.5 TO 2.5 LAKHS PER ACRE. ALL THE LANDS WERE SOLD BEFORE THE GIFTS WERE GIVEN TO MY GRAND-DAUGHT ERS. THE SALE PROCEEDS FROM THE AGRICULTURAL LANDS WERE ENTIRELY RECEIVED IN CASH FROM DIFFERENT BUYERS. THE GIFTS WERE MADE TO MY GRANDDAUGHTERS A S AND WHEN THEY VISITED US FROM TIME TO TIME IN CASH..APART FROM THE PROCEEDS FROM SALE OF LAND WE WERE ALSO IN RECEIPT AGRICULTURAL INCOME FROM THE LANDS AT AN AVERAGE OF AROUND RS.1.5 TO 2.5 LAKHS PER CROP. AN D IN A YEAR WE USED TO GROW 2 CROPS. [ REFER: PAGES 33 & 34 OF PR]. TO SUBSTANTIATE HER CLAIM, SHE HAD ALSO PRODUCED COPIES OF (I) AGREEMENT OF S ALE OF IMMOVABLE PROPERTY DATED 6.2.2003 AND ALSO (II) AGREEMENT OF SALE DATED 22.5.2003. THE GENUINENESS OF SUCH AGREEMENTS CANNOT BE SUSPEC TED AS ON A CAREFUL SCRUTINY OF THE COPIES OF STAMP PAPERS, IT COULD BE SEEN THAT THE STAMP PAPERS WERE PURCHASED ON 5.2.2003 AND 22.5.2003 I.E ., ON THE DATES OF ITA NO. 101/B/2014 PAGE 8 OF 11 ENTERING INTO SUCH AGREEMENTS. MOREOVER, THE DONOR HAD SOLEMNLY AFFIRMED BEFORE A STATUTORY AUTHORITY NOTARY THAT SHE AND HER LATE HUSBAND HAVE JOINTLY MADE CASH GIFTS OF RS.6.8 LAKHS AND RS.8.4 LAKHS TO THEIR MINOR GRAND CHILDREN PRADYUTHA AND REETHU DURING THE YEAR S-ENDED 31.3.2003 AND 31.03.2004 RESPECTIVELY FROM PARTLY OUT OF AGR ICULTURAL INCOME AND PARTLY OUT OF THE SALE PROCEEDS OF THE LANDS OWNED BY THEM. THE ABOVE AFFIRMATION MADE BY THE DONOR IN A SWORN AFFIDAVIT CANNOT BE DISBELIEVED. TO SUBSTANTIATE HER CLAIM, THE DONOR HAD ALSO FURNI SHED COPIES OF SALE AGREEMENTS ENTERED INTO WITH THE PROSPECTIVE BUYERS . SHE HAD ALSO ASCERTAINED IN HER SWORN STATEMENT THAT THE SALE PR OCEEDS OF AGRICULTURAL PRODUCES AND AGRICULTURAL LANDS WERE RECEIVED BY HE R [ LATE HUSBAND] ONLY IN CASH. AS THE LATE HUSBAND WAS IN FULL CONTROL OF SUCH AFFAIRS, SHE COULD ONLY AVER THE EVENTS WHICH TOOK PLACE WHEN HER HUSB AND WAS ALIVE. RECEIVING CASH FOR THE SELLING OF AGRICULTURAL PROD UCES ARE PREVALENT EVEN ON THIS DATE IN RURAL AREAS. MOST OF THE AGRICULTU RISTS WHO ARE SEMI-LITERATE AND UNAWARE OF LEGAL IMPLICATIONS TEND TO RECEIVE T HE SALE PROCEEDS OF THEIR AGRICULTURAL PRODUCES ONLY IN CASH. IF THEY HAVE TO INSIST FOR THE PROCEEDINGS TO BE DONE THROUGH BANKING CHANNEL, THEY WILL LOSE THEIR BUSINESSES AS WELL AS THE PROSPECTIVE BUYERS. SUCH BEING THE PREVAILI NG CONDITIONS IN THE RURAL AREAS, THE AVERMENTS OF THE DONOR IN THE INSTANT CA SE CANNOT BE DISBELIEVED. THE MAIN REASONING OF THE CIT (A) TO S USPECT THE CLAIM OF THE DONOR TO DONATE SUCH GIFTS WAS THAT NO BOOKS OF ACC OUNT MAINTAINED FOR THEIR AGRICULTURAL INCOME. HOWEVER, MOST OF THE A GRICULTURISTS BEING SEMI- ITA NO. 101/B/2014 PAGE 9 OF 11 LITERATES, THEY DO HAVE NOT SUCH EXPERTISE TO MAINT AIN BOOKS OF ACCOUNT. BEING AN ELDERLY LADY WHO CANNOT FULL FILL ALL THE REQUIREMENTS SET OUT BY THE AUTHORITIES AND TO PUT THE ISSUE AT REST, SHE MIGHT HAVE RESORTED TO REVOKE THE GIFT AT A LATER STAGE, SAY ON 11.12.2010 WHICH, IN OUR VIEW, CANNOT BE CONSTRUED THAT THE CONTENTS OF THE AFFIDAVIT FURNI SHED BY THE DONOR WERE UNTRUE.. 4.2. FURTHER, WE WOULD LIKE TO REFER TO THE FINDI NGS OF THE EARLIER BENCH OF THIS TRIBUNAL IN THE CASE OF MS. PANDURANGA BHARGAV I VAIDYA V. DCIT [ITA NO.1215/BANG/2015 DATED 13.4.2016. FOR APPRECIATIO N OF FACTS, THE RELEVANT PORTION OF THE FINDINGS OF THE EARLIER BEN CH (SUPRA) IS REPRODUCED AS UNDER: 6.1. THE HONBLE SUPREME COURT IN CATEGORICAL TER MS HAS HELD THAT EVEN IF AN EXPLANATION OFFERED BY AN ASSE SSEE IS NOT ACCEPTABLE, STILL THE AO HAS DISCRETION NOT TO MAKE ADDITION KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE. IF BASED ON PARTICULAR SET OF FACTS IT IS HIGHLY UNLIK ELY THAN AN ASSESSEE COULD HAVE EARNED THAT KIND OF INCOME, THE AO CAN HOLD THAT NO ADDITION IS CALLED FOR, EVEN IF THE EXPLANA TION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY. THE PRESENT CASE IS A FIT CASE WHERE THE AO OUGHT TO HAVE EXERCISED THE DISCRETION IN FAVOUR OF THE ASSESSEE. THERE IS NO DISPUTE THAT THE FATHER OF THE CASE APPEARED BEFORE THE AO AND STATED THAT THE CASH DEP OSITS AND WITHDRAWALS IN KARNATAKA BANK ACCOUNT ARE PART OF H IS TRANSACTIONS. THE ITAT, A BENCH OF BANGALORE IN NUSRA IMRAN V. ITO AT PARA 8 HELD THAT WHEN THE PERSONS WHO LEN T THE MONEY APPEARED BEFORE THE AO AND CONFIRMED THE TRANSACTIO N, THE ADDITION U/S 69 IS NOT WARRANTED. ON SIMILAR REASO NING WHEN FATHER OF THE ASSESSEE HAS STATED THAT HE HAD DEPO SITED CASH IN THE BANK ACCOUNT, IT IS NOT PERMISSIBLE FOR THE AO TO R EJECT SUCH AN EXPLANATION AND DRAW AN ADVERSE INFERENCE. THE HON BLE GUJARAT HIGH COURT IN THE CASE OF MURLIDHAR LAHORIMAL V. CI T 280 ITR 512 HELD THAT WHEN THE CREDITOR/DONOR HAVING APPEAR ED BEFORE THE AO THE GENUINENESS OF THE TRANSACTION IS ESTABLISHE D. IN THE ITA NO. 101/B/2014 PAGE 10 OF 11 PRESENT CASE, ASSESSEES FATHER APPEARED AND EXPLAI NED THE TRANSACTIONS AND IT IS UNDISPUTED THAT THE ASSESSEE COULD NOT HAVE EARNED SUCH HUGE UNACCOUNTED INCOME OF RS.24.00 LAK HS FOR MAKING DEPOSITS OF THE SAME IN HER BANK ACCOUNT. IN SUCH FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION MADE BY THE AO IS NOT WARRANTED AND WE DELETE THE SAME. IT IS ORDERED AC CORDINGLY. 4.3. TAKING INTO ALL THE FACTS AND CIRCUMSTANCES O F THE ISSUE FOR CONSIDERATION AS DISCUSSED IN THE FORE-GOING PARAGR APHS AND ALSO IN CONSONANCE WITH THE FINDINGS OF THE EARLIER BENCH O F THIS TRIBUNAL (SUPRA) WE ARE OF THE VIEW THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISBELIEVING THE ASSERTION OF THE DONOR AND MAKING AN ADDITION OF RS.8,40,000/- UNDER THE HEAD INCOME FROM OTHER SOU RCE FOR THE AY 2004- 05, IN ESSENCE, THE ADDITION OF RS.8,40,000/- MADE BY THE AO IS DELETED. 5. IN THE SECOND GROUND, THE ASSESSEE HAD OBJECTED TO THE CIT (A)S STAND IN CONFIRMING THE ADDITION OF RS.6,80,000/- M ADE BY THE AO ON PROTECTIVE BASIS. DURING THE COURSE OF HEARING, TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION OF RS.6.8 LAKH S MADE WITHOUT APPRECIATING THE FACT THAT AN ASSESSMENT ON SUBSTAN TIVE BASIS WAS MADE SEPARATELY AS PER THE ASSESSMENT ORDER DT.26.12.201 1 WHICH IS SUBJECT MATTER OF APPEAL (FILED ON 25.1.2012) BEFORE THE CI T (A)-III, BANGALORE AND THE SAME IS PENDING FOR DISPOSAL. IN VIEW OF THE A BOVE, THIS GROUND IS NOT ADJUDICATED. 6. IN THE RESULT, THE ASSESSEES APPEAL FOR THE AY 2004-05 IS ALLOWED. ITA NO. 101/B/2014 PAGE 11 OF 11 ORDER PRONOUNCED IN THE OPEN COURT ON 20-01-2017. SD/- SD/- (INTURI RAMA RAO) (GEORGE GEOR GE K) ACCOUNTANT MEMBER JUD ICIAL MEMBER BANGALORE. DATED:20 TH JANUARY, 2017. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.