Shri. R. Manjunath, Bangalore V. ITO, Bangalore

ITA 1153/BANG/2010

• Counselvise Citation: 115321114 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P H NARGUNDKAR
• Assessee Lawyers: V SRINIVASAN
• Keywords: Gift; Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1153/BANG/2010 ASSESSMENT YEAR : 2006-07 SHRI R. MANJUNATH, # 67, 4 TH PHASE, 4 TH CROSS, II MAIN ROAD, DOLLARS COLONY, J.P. NAGAR, BANGALORE 560 078. PAN : AFWPM 1290F VS. THE INCOME TAX OFFICER, WARD 4(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, C.A. RESPONDENT BY : SHRI P.H. NARGUNDKAR, ADDL.CIT(DR) DATE OF HEARING : 22.11.2011 DATE OF PRONOUNCEMENT : 22.11.2011 O R D E R PER N.K. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 14.6.2010 OF COMMISSIONER OF INCOME-TAX-II, BANGALORE. 2. THE ASSESSEE HAS RAISED AS MANY AS FOUR GROUNDS, OUT OF WHICH GROUNDS NO. 1 AND 4 ARE GENERAL IN NATURE AND DO NO T CALL FOR OUR COMMENTS, WHILE THE GRIEVANCE OF THE ASSESSEE VIDE GROUNDS NO.2 & 2.1 ITA NO.1153/BANG/10 PAGE 2 OF 11 RELATES TO THE CONFIRMATION OF ADDITION OF RS.17 LA KHS MADE BY THE ASSESSING OFFICER IN RESPECT OF GIFT. 3. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE TH AT THE ASSESSEE FILED RETURN OF INCOME ON 22.3.2007 DECLARING TOTAL INCOM E OF RS.2,13,420. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO FURNISH T HE DETAILS OF SOURCES FOR CASH DEPOSITS AMOUNTING TO RS.28,71,500 IN THE SB ACCOUNT. IN RESPONSE, THE ASSESSEE FILED A STATEMENT OF AFFAIRS AS ON 31.3.2006 AND ALSO CASH FLOW STATEMENT IN RESPECT OF THE DEPOSITS . THE AO NOTICED THAT AS PER THE CASH FLOW STATEMENT, FOLLOWING ARE THE SOUR CES WHICH WERE OTHERWISE GENERATED FROM THE BANK ACCOUNTS AND THE BUSINESS OF THE ASSESSEE: DATE SOURCES CLAIMED AMOUNT 15.4.05 GIFT FROM FATHER SRI A T RAMAPPA 5,00,000 15.4.05 GIFT FROM FATHER-IN-LAW H.C.JAYANTH 5,00,00 0 4.5.05 GIFT FROM FATHER 5,00,000 31.8.05 GIFT FROM FATHER IN LAW 2,00,000 ALL THE ABOVE FOUR ITEMS WERE STATED TO BE GIFTS FR OM FATHER AND FATHER-IN- LAW. IN SUPPORT OF THE ABOVE, THE ASSESSEE ALSO FIL ED THE CONFIRMATIONS. THE AO OBSERVED THAT THOUGH PROOF OF AGRICULTURAL LANDS OWNED BY THEM HAD BEEN FURNISHED, BUT THERE WAS NO EVIDENCE IN REGARD TO EITHER THE DETAILS OF CROPS GROWN, PROCEEDS RECEIVED AND ALSO PROFIT EARN ED AND THAT ALL THE INCOME EARNED BY THEM COULD NOT BE GIVEN TO THE ASS ESSEE FOR THE SIMPLE REASON THAT THE FAMILY MAY CONSIST OF MANY OTHER ME MBERS, WHO TOO WOULD HAVE RIGHT OVER THE INCOME. HE ALSO MENTIONED TH AT THE DONORS WERE NOT ITA NO.1153/BANG/10 PAGE 3 OF 11 ASSESSED TO TAX AND ALL THE RECEIPTS WERE IN CASH W HICH WERE NOT VERIFIABLE. HE ACCORDINGLY MADE THE ADDITION OF RS.17 LAKHS. 4. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A PPEALS) AND THE SUBMISSIONS MADE BEFORE HIM AS MENTIONED IN PARA 3. 1 OF THE IMPUGNED ORDER READS AS UNDER: 4. THE ASSESSEES PARENTS HAVE SUBSTANTIAL CULTIV ATED AGRICULTURAL LAND HOLDING OF ABOUT 20 ACRES. THE DE TAILS OF CULTIVATED LAND HOLDING AND ALSO THE NATURE OF CROP GROWN IS AVAILABLE TO THE EXTENT OF 15 ACRES 33 GUNTAS. THE ASSESSEES FATHER-IN-LAW HAS 6 ACRES 38 GUNTAS OF CULTIVATED A GRICULTURAL LAND AT HEGGARU VILLAGE, KOPPA TALUK, CHICKMAGALUR DIST. THE PROOF OF REALIZATION OF SALE PROCEEDS OF AGRICULTURAL PRO DUCE IS ALSO AVAILABLE. 5. THE AGRICULTURAL PRODUCTS LIKE ARECANUT ARE KEP T IN STOCK WAITING FOR BEST MARKET PRICE. THE SAME WILL BE SOL D WHEN THE MARKET PRICE IS GOOD OR WHEN IN NEED OF FUNDS. THIS AMOUNT WAS USED TO GIVE GIFT TO SON/SON-IN-LAW. 6. THE FOLLOWING DOCUMENTS & EVIDENCES ARE ENCLOSE D FOR YOUR KIND PERUSAL: A) RECORDS OF RIGHT ISSUED BY THE VILLAGE ACCOUNTA NT TOWARDS PROOF OF AGRICULTURAL LAND HOLDINGS TO THE EXTENT O F 15 ACRES 33 GUNTAS BY THE APPELLANTS PARENTS SHRI A.P.RAMAPPA AND SMT. SUSHEELAMMA. B) COPY OF RECORD OF RIGHTS ISSUED BY VILLAGE ACCO UNTANT TOWARDS PROOF OF AGRICULTURAL LAND HOLDINGS TO THE EXTENT OF 6 ACRES 38 GUNTAS BY THE APPELLANTS FATHER-IN-LAW SH RI H.C. JAYANTH. C) PROOF OF REALISATION OF SALE PROCEEDS OF ARECAN UT BY SHRI A.P. RAMAPPA. I. SHRI A. P. RAMAPPA DATE AMOUNT (RS.) 8/2/2005 1,22,620 15/2/2005 77,460 22/2/2005 1,28,974 15/3/2005 1,50,143 ITA NO.1153/BANG/10 PAGE 4 OF 11 24/3/2005 65,181 7/4/2005 78,455 12/4/2005 1,06,566 21/4/2005 1,12,022 26/4/2005 37,332 28/4/2005 89,911 2/5/2005 90,173 ------------- TOTAL 10,58,837 ------------- II. SHRI H.C.JAYANTH 29/3/2005 1,39,502 5/4/2005 82,893 8/4/2005 1,43,760 13/4/2005 2,30,000 16/8/2005 62,368 19/8/2005 53,401 26/8/2005 55,226 ------------ TOTAL 7,67,150 ------------ 7. THE LEARNED A.O. MERELY SUSPECTS THAT APPELLANT S PARENTS AND FATHER-IN-LAW WOULD NOT HAVE SUFFICIENT FUNDS T O GIVE THE GIFT AND THEREFORE, SHE MADE THE IMPUGNED ADDITION, WHIC H IS PURELY ON SUSPICION AND SURMISE, ASSUMPTIONS AND PRESUMPTI ONS AND OPPOSED TO GROUND REALITIES. IT MAY NOT BE OUT OF P LACE TO MENTION HERE THAT THE LEARNED A.O. HAS NOT BROUGHT ANY MATE RIAL ON RECORD TO CONSIDER THE APPELLANTS PARENTS AND FATHER-IN-L AW DID NOT HAVE THE RESOURCES TO MAKE THE GIFTS. 5. THE LD. CIT(APPEALS) ALSO CALLED FOR THE REMAND REPORT FROM THE AO, IN THE SAID REPORT THE AO STATED THAT THOUGH NUMBER OF AGRICULTURAL LANDS OWNED BY THE DONORS HAD BEEN FURNISHED, BUT THERE W AS NO EVIDENCE IN REGARD TO EITHER THE DETAILS OF CROPS GROWN AND PRO CEEDS RECEIVED AND ALSO THE PROFIT EARNED. THE LD. CIT(A) ALSO OBSERVED TH AT IN THE REMAND REPOT THE AO HAD STATED THAT VERIFICATION HAD BEEN MADE F ROM 3 PARTIES TO WHOM THE ASSESSEE CLAIMED TO HAVE SOLD AGRICULTURAL PROD UCED BY HIS FATHER (THE ITA NO.1153/BANG/10 PAGE 5 OF 11 DONOR), BUT THE NOTICES SENT TO TWO PARTIES WERE RE TURNED UNSERVED AS THE BUSINESS HAD BEEN CLOSED ABOUT 5-6 YEARS BACK. AS REGARDS TO THE PROOF OF REALIZATION OF SALE PROCEEDS FURNISHED BY SHRI H.C. JAYANTH, THE ASSESSEES FATHER-IN-LAW, THE AO STATED IN THE REMAND REPORT T HAT NO EVIDENCE WAS ADDUCED FOR RECEIPT OF Q 2,30,000, WHILE ONE OF THE PARTIES STATED THAT NO BUSINESS WAS MADE WITH SHRI H.C. JAYANTH AND THE BU SINESS OF THE OTHER PARTY WAS CLOSED ABOUT 7-8 YEARS AGO. THE LD. CIT (APPEALS) FORWARDED THE REMAND REPOT TO THE ASSESSEE, WHO FURNISHED THE REJ OINDER AND CONTENDED AS UNDER:- 2. THE LEARNED A.O. HAS STATED THAT THE PARTIES TO WHOM THE ARECANUT WERE SOLD ARE NOT EXISTING NOW AND THE NOT ICES WERE RETURNED UNSERVED. IN THIS CONNECTION, I WOULD LIKE TO BRING TO YOUR KIND NOTICE THE GROUND REALITIES: I) DURING THE YEAR 2006-07 THERE HAS BEEN HEAVY FL UCTUATION IN THE PRICES OF ARECANUT. MANY TRADERS, WHO HAD ST ORED ARECANUT PURCHASED AT HIGH PRICES HAD TO SELL THE S TOCK AT VERY LOW PRICES, SINCE THE PRICES HAD CRASHED. DUE TO TH IS MANY TRADERS LOST HEAVILY AND HAD TO SHUT THEIR SHOPS. THE FACT THAT NOTICE COULD NOT BE SERVED SINCE THE SHOPS ARE NOT EXISTING NOW, DOES NOT MEAN THAT THEY WERE NOT TRADING IN TH E YEAR 2005-06. FURTHER, THE STATEMENT STATING THAT THE S HOPS ARE NOT EXISTING SINCE 5 6 YEARS IS A GENERAL STATEMENT, WHICH IS OBTAINED IN JAN, 2010 AFTER A GAP OF 4 YEARS. (II) IN ORDER TO ESTABLISH THAT SUCH TRADERS WERE EXISTING DURING THE YEAR 2005-06, WE APPROACHED AGRICULTURAL PRODUCE MARKETING COMMITTEE, SHIMOGA (APMC IS ESTABLISHED AND CONTROLLED BY GOVERNMENT OF KARNATA KA) TO ISSUE A CONFIRMATION THAT SUCH TRADERS WERE EXISTIN G AS PER THEIR RECORDS. SINCE APMC HAD TO SEARCH OLD RECORD S, AND ALSO DUE TO RECENT PUBLIC DISTURBANCES LOCALLY, OBT AINING SUCH CONFIRMATION IS BEING DELAYED. HOWEVER, AS ON DATE APMC HAS ISSUED CONFIRMATION IN CASE OF M/S. PRAGATI TRA DERS VIDE THEIR LETTER NO.3818/2009-10 DATED 22.03.2010, WHIC H STATED THAT M/S. PRAGATHI TRADERS WHO WERE TRADING IN APMC YARD, HAVE CLOSED DOWN IN THE YEAR 2007-08 DUE TO REDUCED BUSINESS ACTIVITY. THE CERTIFICATE IS ATTACHED HER EWITH. ITA NO.1153/BANG/10 PAGE 6 OF 11 3. THE LEARNED A.O. STATED THAT NO PROOF HAS BEEN G IVEN WITH REGARD TO SALE OF ARECANUT TO THE EXTENT OF RS.2.30 ,000/- IN CASE OF MY FATHER IN LAW, SRI H.C. JAYANTH. IN THI S REGARD, I WOULD LIKE TO SUBMIT THAT I HAD ALREADY SUBMITTED T HE CONFIRMATION LETTER DATED 13.04.2005 FROM SRI BHOJR AJ M.R., KONANDUR POST, TIRTHAHALLI TALUK, SHIMOGA DIST. CON FIRMING THE PAYMENT OF RS.2,30,000/- TOWARDS LEASE OF 1 ACR E 25 GUNTAS OF ARECANUT FARM FOR A PERIOD OF ONE YEAR. 4. THE LEARNED A.O. HAS REPORTED THAT SOME OF THE T RADERS TO WHOM AGRICULTURAL PRODUCE WERE SOLD ARE NOT EXISTIN G NOW AND CONFIRMATION COULD NOT BE OBTAINED. IN THIS CO NNECTION, I BEG TO STATE THAT NOTHING TURNS MUCH ON THESE FACTS REPORTED BY THE LEARNED A.O. IT IS SUBMITTED THAT THE DENIA L OF ONE OR TWO TRADERS IS UNDERSTANDABLE IN AS MUCH AS, THEY B EING INCOME TAX ASSESSEES MIGHT NOT HAVE ACCOUNTED THE P URCHASE OF SALE OF ARECANUT AND HENCE THEY MIGHT HAVE DENIE D THE TRANSACTION. MY FATHER AND FATHER-IN-LAW ARE ONLY AGRICULTURISTS AND HAS NOT OTHER SOURCE OF INCOME. IT IS SUBMITTED THAT THE ARECANUTS ARE SOLD NOT ONLY AT A PMC YARD, BUT ALSO TO SO MANY UNORGANIZED AND UNREGISTERED TR ADERS WHEREIN THE PROOF OF SALE ARE NOT MAINTAINED. THAT APART, IT IS SUBMITTED THAT MY FATHER AND FATHER-IN-LAW HAS NOT ONLY INCOME FROM SALE OF ARECANUT, BUT THEY ALSO DERIVES INCOME FROM GROWING PADDY AND BANANA. CONSIDERING ALL THE SE FACTS IN TOTO, THE SOURCES OF INCOME OF MY FATHER AND FAT HER-IN-LAW FROM AGRICULTURAL OPERATION CAN NOT BE BLINDLY DISR EGARDED BUT MUST BE ESTIMATED ON A RATIONAL BASIS AND FROM A PR ACTICE (PRACTICAL) STAND POINT BASED ON THE OTHER EVIDENCE TENDERED BY ME IN THE SHAPE OF CROPS GROWN AS AVAILABLE FROM VILLAGE ACCOUNTANTS CERTIFICATE. VIEWED FROM THIS ANGLE OF THE MATTER, THERE IS NO DOUBT THAT CAN ENTERTAINED WITH REGARD TO THE CAPACITY OF MY FATHER AND FATHER-IN-LAW TO MAKE THE IMPUGNED GIFT TO ME DURING THE YEAR UNDER CONSIDERA TION. 5. A.O. STATED THAT THE GIFT WAS NOT RECEIVED AT ON CE INSTANCE BUT WAS SHOWN AS GIFT RECEIVED IN CASH WHENEVER A DEPOS IT INTO THE BANK WERE MADE. AS ALREADY STATED IN OUR EARLI ER SUBMISSION, THE GIFTS ARE RECEIVED FROM MY FATHER/F ATHER-IN- LAW AND WE ARE ALL CLOSELY KNIT FAMILY. WE USED TO REGULARLY TRAVEL TO OUR HOME TOWN, SHIMOGA AND WHENEVER, I AM IN NEED OF CASH, MY FATHER/FATHER-IN-LAW USED TO HANDO VER TO ME WHICH WAS DEPOSITED INTO MY BANK ACCOUNT. THEREFOR E, THE CONTENTION OF THE LEARNED A.O. THAT THE GIFT WAS NO T RECEIVED AT ONE INSTANCE BUT AT SEVERAL TIMES DURING THE YEA R DOES NOT HOLD ANY SUBSTANCE. ITA NO.1153/BANG/10 PAGE 7 OF 11 6. THE LD. CIT(A) POINTED OUT THAT THE BOTH THE DON ORS I.E., SHRI A.P. RAMAPPA, FATHER OF THE ASSESSEE AND SHRI H.C. JAYAN TH, FATHER-IN-LAW OF THE ASSESSEE, FURNISHED CONFIRMATION WHICH HAD BEEN REPRODUCED IN PARAS 3.9 AND 3.10 OF THE IMPUGNED ORDER. THE LD. CIT(A ) POINTED OUT THAT A MAJOR PORTION OF AGRICULTURAL INCOME WAS GIVEN AS G IFT BY THE DONORS TO THE ASSESSEE, WHICH WAS BEYOND HUMAN PROBABILITIES, THA T A MAJOR PORTION OF HARD EARNED MONEY COULD BE DEPARTED SPECIFICALLY TO WARDS GIFTS. 7. THE LD. CIT(A) OBSERVED THAT IDENTITY OF DONORS HAD BEEN ESTABLISHED, HOWEVER FINANCIAL CAPACITY OF THE DONO RS COULD NOT BE ESTABLISHED AND THE ASSESSEE HAD FAILED TO ESTABLIS H THE FACT THAT THE GIFT WAS GENUINE. THE LD. CIT(A) POINTED OUT THAT THE A SSESSEE RECEIVED GIFTS FROM HIS FATHER/FATHER-IN-LAW FOR THE FIRST TIME AN D THE ASSESSEE NEITHER RECEIVED NOR MADE ANY GIFT EXCEPT THE INSTANT GIFTS OSTENSIBLY RECEIVED TO PURCHASE AN IMMOVABLE PROPERTY AND THE DONORS DID N OT APPEAR BEFORE THE AO FOR EXAMINATION IN THE ASSESSMENT OR REMAND PROC EEDINGS AND THERE WAS NO INFORMATION ABOUT THE OCCASION FOR RECEIVING THE GIFTS. THE LD. CIT(A) AFTER CONSIDERING THE SURROUNDING CIRCUMSTAN CES WAS OF THE OPINION THAT THE DOCUMENTS FURNISHED IN SUPPORT OF SOURCE O F GIFTS COULD NOT BE CONSIDERED TO BE GENUINE GIFTS TAKEN BY THE ASSESSE E. HE THEREFORE CONFIRMED THE ADDITION MADE BY THE AO. 8. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND FURTHER SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS IDE NTICAL TO THE ISSUE INVOLVED IN THE CASE OF SHRI MADAN R. V. ITO IN ITA NO.1145/BANG/2010 FOR THE A.Y. 2006-07 WHEREIN VIDE ORDER DATED 29.9.2011 , THE ITAT A BENCH ITA NO.1153/BANG/10 PAGE 8 OF 11 BANGALORE DECIDED THE ISSUE IN FAVOUR OF THE ASSESS EE. COPY OF THE SAID ORDER WAS FURNISHED, WHICH IS PLACED ON RECORD. 9. IN HIS RIVAL SUBMISSIONS, THE LD. DR STRONGLY SU PPORTED THE ORDERS OF AUTHORITIES BELOW AND REITERATED THE OBSERVATIONS M ADE BY THE LD. CIT(A) IN THE IMPUGNED ORDER. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND THE CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IT IS NOTICED THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS INVOLVED IN THE CASE OF SHRI MADAN R. V. ITO, BANGALORE (SUPRA) AND EVEN THE RIVAL CONTENTIONS WERE ALSO SIMILAR. IN THE SAID CASE OF SHRI MADAN R. V. ITO (SUPRA) , THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 14 TO 19 OF THE AFORESAID REFERRED TO ORDER, WHICH READ AS UNDER: 14. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE O N THE RECORD. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE RECEIVED GIFTS AMOUNTING TO RS.20 LAKHS FROM HIS FATHER-IN-L AW. IDENTITY OF THE DONOR WAS NOT IN DISPUTE. THE ONLY DOUBT OF TH E AO WAS TOWARDS THE FINANCIAL CAPACITY OF THE DONOR AND THE OCCASION FOR MAKING THE GIFT. AS REGARDS THE OCCASION WAS CONCE RNED, THE ASSESSEE WAS IN NEED OF FUNDS FOR PURCHASING A HOUS E AT BANGALORE AND THIS FACT WAS CONFIRMED BY THE DONOR VIDE HIS CONFIRMATION LETTER, WHICH THE ASSESSEE FILED BEFOR E THE AO. 15. IN THE INSTANT CASE, IT IS NOTICED THAT THE DO NOR WAS HAVING ONLY TWO CHILDREN, ONE SON AND ONE DAUGHTER AND HAD GIVEN THE GIFT TO THE HUSBAND OF HIS DAUGHTER I.E., HIS SON-I N-LAW, SO IT IS NOT A CASE THAT THE DONOR WAS HAVING VERY LARGE FAMILY. IT IS ALSO NOTICED THAT THE ASSESSEE FILED A COPY OF THE AGREE MENT ENTERED BY HIS FATHER-IN-LAW WITH ONE SHRI K.C. CHANDRASHEKAR FOR SALE OF BANANA FOR RS.10 LAKHS ON 25.4.2005 AND THE ASSESSE E HAD CLAIMED THAT HE HAD RECEIVED THE GIFT OF RS.5 LAKHS ON 21.6.05 AND ANOTHER RS.5 LAKHS ON 31.8.05. SO THE EXPLANATION OF THE ASSESSEE THAT HE RECEIVED THE GIFT FROM HIS FATHER-IN-LAW, W HO WAS HAVING ITA NO.1153/BANG/10 PAGE 9 OF 11 AGRICULTURAL INCOME APPEARS TO BE PLAUSIBLE BECAUSE NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE AFORESAI D AMOUNT OF RS.10 LAKHS RECEIVED BY THE ASSESSEES FATHER-IN-LA W CLAIMED TO HAVE BEEN GIVEN AS GIFT WAS UTILIZED ELSEWHERE. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE FURNISHED EVIDENCE FOR RE ALIZATION OF SALE PROCEEDS OF ARECANUT AMOUNTING TO RS.16,86,125 AND THE CLAIM OF THE ASSESSEE WAS THAT REST OF THE GIFT AMOUNTING TO RS.10 LAKHS WAS OUT OF THE AFORESAID AGRICULTURAL INCOME, THE S AID CLAIM ALSO APPEARS TO BE PLAUSIBLE, BECAUSE IT IS NOT THE CASE OF THE DEPARTMENT THAT THE SAID INCOME WAS UTILIZED BY THE DONOR ELSEWHERE AND NOT GIVEN TO THE ASSESSEE AS A GIFT A S CLAIMED IN HIS CONFIRMATION LETTER. 16. IN THE PRESENT CASE IT IS ALSO NOTICED THAT NOW HERE THE AO MENTIONED THAT HE ISSUED SUMMONS U/S. 131 OF THE AC T TO THE DONOR TO APPEAR BEFORE HIM, SO THE PLEA TAKEN BY TH E LD. CIT(A) THAT THE DONOR DID NOT APPEAR BEFORE THE AO FOR EXA MINATION IN THE ASSESSMENT PROCEEDINGS OR REMAND PROCEEDINGS WA S NOT SUFFICIENT TO HOLD THAT THE GIFT GIVEN BY THE FATHE R-IN-LAW OF THE ASSESSEE FOR PURCHASING A HOUSE WAS A NON-GENUINE O R BOGUS GIFT. 17. ANOTHER REASON GIVEN BY THE LD. CIT(APPEALS) WH ILE CONFIRMING THE ACTION OF THE AO WAS THAT THE DONOR WAS HAVING TWO CHILDREN I.E., ONE SON AND ONE DAUGHTER, AND TH E SON WAS STAYING WITH THE DONOR AND WAS ELIGIBLE TO GET THE SHARE OF AGRICULTURAL INCOME, BUT NOTHING HAS BEEN BROUGHT O N RECORD TO SUBSTANTIATE THAT ALL THE AGRICULTURAL INCOME EARNE D BY THE ASSESSEE IN THIS YEAR OR IN THE EARLIER YEARS WAS G IVEN TO THE SON ONLY. ON THE CONTRARY, THE DONOR, SHRI V.M. SADANA NDA, FATHER- IN-LAW OF THE ASSESSEE, IN HIS CONFIRMATION LETTER CLEARLY STATED THAT IT WAS HIS MORAL RESPONSIBILITY TO HELP HIS DAUGHTE R AND SON-IN- LAW BY ASSISTING THEM FINANCIALLY WHENEVER THEY WER E IN NEED OF FUNDS, HENCE HE HAD GIVEN RS.20 LAKHS AS GIFT FROM 1.4.2005 TO 31.03.2006. THE SAID CONTENTION OF THE DONOR HAD N OT BEEN CONTROVERTED AT ANY STAGE. 18. DURING THE COURSE OF HEARING, THE LD. DR ALSO ARGUED THAT EARNING OF AGRICULTURAL INCOME WAS NOT SUFFICIENT T O HOLD THAT THE DONOR HAD GIVEN GIFTS OUT OF HIS AGRICULTURAL INCOM E AND SOME AMOUNT WAS ALSO REQUIRED TO BE SPENT FOR AGRICULTUR AL EXPENSES. HOWEVER, IN THE INSTANT CASE, IT IS NOT BROUGHT ON RECORD THAT THE AGRICULTURAL INCOME EARNED BY THE DONOR WAS UTILIZE D ELSEWHERE AND NOT USED FOR GIVING GIFT TO THE ASSESSEE. IT I S ALSO NOT THE CASE OF THE DEPARTMENT THAT THE DONOR WAS NOT HAVING ANY EARLIER SAVINGS TO BE SPENT FOR AGRICULTURAL EXPENSES OR HE WAS SPENDING THE AMOUNT FOR AGRICULTURAL EXPENSES ONLY OUT OF TH E CURRENT AGRICULTURAL INCOME. ITA NO.1153/BANG/10 PAGE 10 OF 11 19. WE, THEREFORE, CONSIDERING THE TOTALITY OF FAC TS AS DISCUSSED HEREINABOVE, ARE OF THE VIEW THAT THE ASSESSEE ESTA BLISHED THE IDENTITY OF THE DONOR WHO WAS HIS FATHER-IN-LAW AND THE DONOR CONFIRMED THE GIFT GIVEN TO THE ASSESSEE FOR PURCHA SING A HOUSE AT BANGALORE, SO THERE WAS AN OCCASION WHICH WAS TO PU RCHASE THE HOUSE. THE GIFT OF RS.20 LAKHS WAS GIVEN OUT OF AG RICULTURAL INCOME OF RS.26,86,125, WHICH FACT HAS ALSO BEEN ME NTIONED BY THE LD. CIT(A) AT PARA 3.8(III) OF PAGE 13 OF THE I MPUGNED ORDER AND THE DEPARTMENT HAD NOT BROUGHT ANY MATERIAL ON RECORD THAT THE AGRICULTURAL INCOME EARNED TO THE EXTENT OF RS. 26,86,125 BY THE DONOR I.E., FATHER-IN-LAW OF THE ASSESSEE WAS U TILIZED ELSEWHERE AND NOT FOR GIVING THE GIFT AS CLAIMED BY THE ASSESSEE AND CONFIRMED BY THE DONOR. THEREFORE, CREDITWORTH INESS WAS ALSO PROVED, AS SUCH THE LD. CIT(A) WAS NOT JUSTIFI ED IN CONFIRMING THE ACTION OF THE AO WHO CONSIDERED THE GIFT TO THE ASSESSEE AS NON-GENUINE AND MADE ADDITION. IN THAT VIEW OF THE MATTER, WE DELETE THE ADDITION MADE BY THE AO AND C ONFIRMED BY THE LD. CIT(APPEALS). 11. WE THEREFORE, IN VIEW OF THE SIMILARITY OF THE FACTS INVOLVED IN THE PRESENT CASE VIS--VIS THE CASE OF SHRI MADAN R. V. ITO (SUPRA) AND RESPECTFULLY FOLLOWING THE ORDER DATED 29.9.2011 IN THE SAID CASE, DELETE THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CI T(APPEALS). 12. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF NOVEMBER, 2011. SD/- SD/- ( SMT. P. MADHAVI DEVI ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 22 ND NOVEMBER, 2011. DS/- ITA NO.1153/BANG/10 PAGE 11 OF 11 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.