Ladi Srinivas Rao, Rayagada V. ITO, Rayagada Ward, Rayagada, Rayagada

ITA 394/CTK/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7252 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 14-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: J M PATTNAIK
• Keywords: Gift; Reasonable cause; Competent authority
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 LADI SRINIVAS RAO, PROP. MAA BAISHNO DEVI MODERN RICE MILL, AT/PO: GUMUDA, DIST: RAYAGADA. VS. ITO, RAYAGADA WARD, RAYAGADA PAN/GIR NO. ACDPL 8345 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI J.M.PATTNAIK, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 10 /01/ 2017 DATE OF PRONOUNCEMENT : 10 /01/ 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - BERHAMPUR, DATED 2.12.2013 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. THE APPEAL IS TIME BARRED BY 202 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION DATED 17.10.2016 SUPPORTED BY AFFIDAVI T FOR CONDONING THE DELAY IN FILING THE APPEAL. AFTER GOING THROUGH THE CONDONATION PETITION, I FIND THAT THE ASSESSEE HAD REASONABLE CAUSE FOR NOT FILING THE APPEAL WITHIN 2 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 THE STIPULATED TIME. LD D.R. DID NOT HAVE ANY OBJECTION FOR CONDONING THE DELAY . I, THEREFORE, CONDONE THE DELAY OF 202 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND ADMIT THE APPEAL FOR HEARING. 3. THE FIRST ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMI NG THE ACTION OF THE ASSESSING O FFICER IN MAKING ADDITION OF RS.4,56,000/ - U/S.68 OF THE ACT ON ACCOUNT OF ALLEGED GIFT. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE INTRODUCED FRESH CAPITAL OF RS.4,56,000/ - . ON BEING ASKED TO FURNISH THE CAPITAL INTRODUCED, THE ASSESSEE PRODUCED HIS FATHER SHRI L. ANAND RAO FOR EXAMINATION FROM WHOM HE HAS RECEIVED CASH GIFT OF RS.4,56,000/ - ON 10.12.2008. THE ASSESSEES FATHER SHRI L. ANAND RAO IN HIS STATEMENT RECORDED ON 19.12.2011 STATED THAT HE HAS MADE CASH GIFT OF RS.4,56,000/ - TO HIS SON DURING THE FINANCIAL YEAR 2008 - 09 OUT OF AGRICULTURAL INC OME. THE ASSESSING OFFICER OBSERVED THAT SHRI L. ANAND RAO WAS AN AGRICULTURIST AND IS NOT ASSESSED TO INCOME TAX. EXCEPT A MEMORANDUM OF GIFT, NO OTHER EVIDENCE HAS BEEN FURNISHED. THE ASSESSEE IS REQUIRED TO PROVE PRIMA FACIE THE CAPACITY OF SUCH DONO R TO MAKE CASH GIFT OF RS.4,56,000/ - ON 10.12.2008 AND GENUINENESS OF TRANSACTION. THE ASSESSEE 3 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 HAS SUBMITTED THAT HIS FATHER SHRI L. ANAND RAO IS LOOKING AFTER CULTIVATION OF AGRICULTURAL LAND OF 26.65 ACRRES AND YIELDING INCOME FROM CULTIVATION AND HAVE SUFFICIENT SAVINGS FROM AGRICULTURE. THE ASSESSING OFFICER OBSERVED THAT NO B ANK ACCOUNT IS MAINTAINED BY SHRI L. ANAND RAO, FATHER OF THE ASSESSEE. THE ASSESSEES FATHER IN HIS STATEMENT STATED THAT HE HAS SOLD PADDY TO THE ASSESSEE WHO IS PROPRIETOR O F MILL TO THE TUNE OF RS.52,250/ - , WHICH WAS OUTSTANDING AS ON 31.3.2009. THE ASSESSING OFFICER OBSERVED THAT AFTER MEETING DOMESTIC EXPENSES, THE ASSESSEES FATHER IS NOT ABLE TO SAVE MONEY TO MAKE SUCH A HUGE CASH GIFT OF RS.4,56,000/ - OUT OF AGRICULTUR AL INCOME. HE HAS OBSERVED THAT MERELY FILING OF CONFIRMATORY LETTER DOES NOT DISCHARGE THE ONUS THAT LIES WITH THE ASSESSEE IN PROVING THE CAPACITY AND GENUINENESS OF THE CASH GIFT SO RECEIVED. HENCE, HE HELD THAT CASH GIFT MADE OF R S.4,56,000/ - ON 10.1 2.2008 IS NOT ACCEPTABLE AND ADDED BACK THE SAME TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED INCOME OF THE ASSESSEE. 5. ON APPEAL BEFORE THE LD CIT(A), THE ASSESSEE SUBMITTED THAT THE DONOR HAS ENOUGH CREDITWORTHINESS TO DONATE THE ABOVE AMOUNT OF RS.4,56 ,000/ - . HE WANTED AN OPPORTUNITY TO PRODUCE NECESSARY EVIDENCES IN THIS REGARD. THEREFORE, THE LD CIT(A) REFERRED THE MATTER TO THE ASSESSING OFFICER FOR VERIFICATION AND COMMENTS VIDE LETTER NO.1459 DATED 5.10.2012. INITIALLY, THE ASSESSING OFFICER REPOR TED VIDE HIS LETTER NO.438 DATED 12.11.2012 THAT THE ASSESSEE COULD NOT PRODUCE THE DONOR AND OTHER EVIDENCES. ON BEING POINTED 4 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 OUT, THE ASSESSEE REQUESTED ONE MORE OPPORTUNITY TO PRODUCE THE DONOR, THE ASSESSING OFFICER, ACCORDINGLY, GAVE ONE MORE OPPOR TUNITY TO THE ASSESSEE AND THE ASSESSEE PRODUCED THE DONOR AND FILED DETAILS BEFORE HIM. THE ASSESSING OFFICER IN HIS REPORT NO.735 DATED 18.3.2013, STATED AS UNDER: SHRI L ANAND RAO HAD ADMITTED OF GIFTING RS.4,56,000/ - TO HIS SON SHRI L.SRINIVAS RAO I.E. THE ASSESSEE AND THE SAME WAS GIVEN IN CASH. IN THE STATEMENT GIVEN DURING SCRUTINY PROCEEDINGS, SHRI RAO HAD STATED THE SOURCE OF INCOME FROM THE SALE OF AGRICULTURAL PRODUCES. NO CERTIFICATE FROM THE COMPETENT AUTHORITY MENTIONING ACTUAL INCO ME FROM AGRICULTURE COULD BE FILED DURING ASSESSMENT PROCEEDINGS. NOW IN COURSE OF STATEMENT GIVEN, HE FILED A CERTIFICATE FROM THE TEHSILDAR, PADMAPUR VIDE CERTIFICATE NO.1799 DT.4.1.2012 WHEREIN HIS INCOME FROM AGRICULTURE HAS BEEN MENTIONED AT RS.3,15, 000/ - . IN THE CERTIFICATE IT IS NOT MENTIONED THE AGRICULTURAL INCOME PERTAINS TO THE F.Y. 2008 - 09 RELEVANT TO THE ASSESSMENT YEAR 2009 - 2010 DURING WHICH HE GIFTED THE AMOUNT OF RS.4,56,000/ - TO THE F.Y. 2011 - 12 RELEVANT TO THE ASSESSMENT YEAR 2012 - 13 DUR ING WHICH THE AGRICULTURAL INCOME WAS ONLY RS.3,15,000/ - . THAT MEANS DURING THE F.Y. 2008 - 09, I.E. THREE YEARS BACK THE INCOME FROM AGRICULTURE IS DEFINITELY VERY MEAGER FOR WHICH SRI RAO HAD NO SUBSTANTIAL AMOUNT TO GIFT TO THE ASSESSEE. VIDE Q.NO.8, I T WAS ASKED TO FILE THE CERTIFICATE FROM THE AUTHORITY CONCERNED MENTIONING THE EXTENT OF AGRICULTURAL INCOME EARNED DURING THE F.Y. 2008 - 09 RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION IN RESPONSE TO WHICH SHRI RAO EXPRESSED HIS INABILITY TO FILE THE S AME. IN THE EARLIER STATEMENT, SHRI RAO HAD ALSO ADMITTED OF EARNING INCOME BY PURCHASING THE PADDY FROM THE LOCAL CULTIVATORS AND SELLING TI TO DIFFERENT PERSONS IN ADDITION TO HIS OWN AGRICULTURAL INCOME. VIDE Q. NBO.9, IT WAS ASKED TO FURNISH SOME OF THE CULTIVATORS ALONGWITH CONFIRMATION LETTERS WITH WHOM HE HAD MADE TRANSACTION. AGAIN SHRI RAO EXPRESSED HIS INABILITY TO FILE THE SAME. SIMILARLY, IN THE STATEMENT GIVEN EARLIER SHRI RAO HAD STATED TO DERIVE AGRICULTURAL INCOME FROM 26.65 ACRES OF LAND STOOD IN THE NAME OF HIS FATHER L LAXMINARAYANA. HOWEVER, ON GOING THROUGH 5 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 THE LAND DOCUMENT F ILED, IT IS SEEN THAT THE TOTAL EXTENT OF LAND IS 44.37 ACRES WHICH STOOD IN THE NAME OF L. LAXMINARAYANA AND L. RAMULU. VIDE Q. NO.12, IT WAS ASKED WHO IS L. RAMULU AND TO PRODUCE THE CERTIFICATE FROM THE COMPETENT AUTHORITY MENTIONING THE EXTENT OF LAND BELONGING TO L. LADMINARAYANA. SHRI RAO INFORMED THAT L RAMUL U IS BROTHER OF HIS FATHER AND NO DOCUMENTARY PARTITION OF THE LAND HAS YET BEEN MADE. THERE IS ONLY VERBAL PARTITION OF THE LAND AS PER WHICH 50% OF LAND BELONGS TO HIS FATHER AND BALANCE 50% BELONGS TO HIS UNCLE. IF 50% OF TOTAL LAND IS TAKEN INTO ACCOUNT THEN IT COMES TO 22.18 ACRES BEING THE SHARE, WHEREAS IN THE STATEMENT HE HAS ADMITTED OF OWN ING THE LAND OF 26.65 ACRES. SHRI RAO DOES NOT MAINTAIN ANY BANK ACCOUNT AND ENTIRE INCOME EARNED HE KEPT IN HIS RESIDENCE. WHILE QUESTIONED WHY IS NOT KEEPING THE CASH IN BANK, IT WAS ANSWERED NO BAN K IS FUNCTIONING IN HIS VILLAGE DERIGAON. IN SUPPORT OF HIS CLAIM, HE FILED A LETTER FORM THE DERIGAON GRAM PANC HA YAT MENTIONING THE FACT THAT NO BANK IS BEING FUNCTIONED IN DERIGAON. VIDE Q. NO.3, IT WAS ASKED TO EXPLAIN THE NEAREST BAN K LOCATED NEAR DERIGAON IN RESPONSE TO WHICH SHRI RAO EXPLAINED THE NE AREST BANK IS LOCATED IN GUMUDA WHICH IS 9 KMS DISTANCE FORM HIS VILLAGE AND THE BANK IS UTKAL GRAMYA BANK. AGAINST WHILE QUESTIONED WHY THE INCOME EARNED WAS NOT KEPT IN THE BANK FOR SAFETY PURPOSE, HE EXPLAINED FO R RISKY PURPOSE FOR BRINGING THE CASH TO GUMUDA THE SAM E WAS KEPT IN THE HOUSE. SHRI RAO DOES NOT MAINTAIN ANY ACCOUNT FOR HIS AGRICULTURAL INCOME AS ADMITTED BY HIM VIDE Q. NO.6. SIMILARLY ON A MEMORANDUM OF GIFT WAS FILED AS WAS FILED IN COURSE OF SCRUTINY PROCEEDINGS. BUT NO GIFT DEED NORMALLY PREPARED IN STAMP PAPER COULD BE FILED. THE BRIEF FACT IS THAT SHRI RAO EARNED AGRICULTURAL INCOME WHEREFROM HE HA D GIFTED THE AMOUNT TO HIS SON WHICH WAS GIVEN IN CASH. HE NEITHER MAINTAINS ANY BANK ACCOUNT NOR FURNISHED THE CERTIFICATE FROM THE COMPETENT AUTHORITY REGARDING ACTUAL AGRICULTURAL INCOME EARNED DURING A.Y. 2009 - 10. NO GIFT DEED WAS ALSO FURNISHED BY HIM BUT ONLY HE FURNISHED A MEMORANDUM OF GIFT WHEREIN AT PARA 2 IT IS MENTIONED THAT THE DONE EXPRESSED HIS DESIRE TO RECEIVE THE GIFT AMOUNT IN CASH ONLY AND THE REASON BEHIND THIS IS BEST KNOWN TO THE ASSESSEE BECAUSE THE ASSESSEE RUNS A RICE MILL AND M AINTAINS THE BANK ACCOUNT WITH SBI, GUNUPUR, DIST RAYAGADA AND NOTHING WAS PREVENTED HIM TO RECEIVE THE GIFT AMOUNT EITHER IN CHEQUE OR DRAFT FROM THE DONOR SO THAT THE GENUINENESS GIFT GIVEN COULD HAVE BEEN 6 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 VERIFIED ON VERIFYING THE BANK ACCOUNT. THE DON OR ALSO COULD HAVE KEPT THE AMOUNT IN THE BANK AT GUMUDA AND BY WITHDRAWING THE AMOUNT FROM THE BANK THE GIFT COULD HAVE BEEN GIVEN TO THE ASSESSEE SO THAT NOBODY CAN DISBELIEVE FOR THE TRANSACTION OF GIFT. HERE THE ASSESSEE NEITHER PROVED THE SOURCE OF I NCOME OF THE DONOR NOR THE TRANSACTION OF GIFT AMOUNT GIVEN TO HIM. 6. IN REPLY TO THE REMAND REPORT, THE ASSESSEE FILED WRITTEN SUBMISSION DATED 26.11.2013 AND STATED AS UNDER: THE HUMBLE EXPLANATION OF THE APPELLANT MOST RESPECTIVELY SHOW THAT DURING THE COURSE OF APPEAL PROCEEDINGS FOR THE ASSESSMENT YEAR 2009 - 10, THE LAO ISSUED SUMMONS TO THE DONOR SHRI LADI ANANDA RAO, FATHER OF THE APPELLANT IN REGARD TO GENUINENESS OF RS.4, 56,000/ - BEING GIFTED TO THE APPELLANT. THE SAID DONOR HAS ADMITTED THE FACT OF THE SAID GIFT BEFORE THE AO AND SUBMITTED THE EVIDENCE OF AGRICULTURAL LANDS IN THE FORM OF MUTATION CERTIFICATE, RI LETTER IN EVIDENCE OF AGRICULTURAL INCOME AND LETTER FROM PANCHAYAT IN E3VIDENCE OF NON - EXISTENCE OF BANKS IN THE DONORS VILLAGE. THE APPELLANT IS SUBMITTING HEREWITH PHOTOSTAT COPIES OF MUTATION CERTIFICATE, RI LETTER AND LETTER FROM PANCHAYAT. 7. THEREAFTER, THE LD CIT( A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THAT AS MENTIONED BY THE ASSESSING OFFICER, AGRICULTURAL CERTIFICATE PRODUCED DURING REMAND DOES NOT SPECIFY THE YEAR TO WHICH SUCH AGRICULTURAL INCOME RELATE TO. LD CIT(A) PRESUMED THAT TH E SAID AGRICULTURAL INCOME OF RS.3,15,000/ - RELATES TO F .Y. 2011 - 12, AS THE CERTIFICATE HAS BEEN ISSUED ON 4.1.2012, THEN THE AGRICULTURAL INCOME IN F.Y. 2008 - 09 I.E. THREE YEARS BACK WILL BE MUCH LESS. THE ASSESSEE FAILED TO PRODUCE ANY CERTIFICATE 7 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 REGA RDING THE AGRICULTURAL INCOME DURING THE RELEVANT FINANCIAL YEAR DESPITE THE SPECIFIC REQUEST BY THE ASSESSING OFFICER. HE OBSERVED THAT IN FACT THE ASSESSEE DOES NOT HAVE ADEQUATE AGRICULTURAL INCOME IS CLEARLY BUTTRESSED BY THE DONOR IN HIS STATEMENT BE FORE THE ASSESSING OFFICER. HE ALSO STATED THAT THE ASSESSEE BUYS PADDY AND SELLS TO DIFFERENT PERSONS . THE DONOR COULD NOT GIVE ANY INFORMATION REGARDING THE PERSONS FROM WHOM SUCH PADDY IS PROCURED FOR TRADING. THE ENTIRE AMOUNT WAS KEPT IN CASH, NO G IFT DEED WAS PRODUCED BEFORE THE ASSESSING OFFICER AND STRANGELY IN THE MEMORANDUM OF GIFT, THE DONE E I.E. THE ASSESSEE EXPRESSED HIS DESIRE TO RECEIVE THE GIFT ONLY IN CASH. 8. BEFORE ME, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF SRIDHAR SAHOO VS ITO, (2016) 182 TTJ (CUTTACK) (UO) 41, WHEREIN, THE TRIBUNAL HELD THAT THE ASSESSEE HAVING FILED THE AFFIDAVITS OF ALL THE CREDITORS WHO ALSO APPEARED BEFORE THE ASSES SING OFFICER IN COMPLIANCE OF THE SUMMONS ISSUED U/S.131 AND EVIDENCE OF THEIR OWNERSHIP OF AGRICULTURAL LANDS TO PROVE THEIR CREDITWORTHINESS, WHICH HAS NOT BEEN REBUTTED BY THE ASSESSING OFFICER BY BRINGING ANY MATERIAL ON RECORD, THE IMPUGNED ADDITION U NDER SECTION 68 CANNOT BE SUSTAINED. 9. ON THE OTHER HAND, LD D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 8 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 10. I FIND THAT IN THE INSTANT CASE, THE ASSESSEE CLAIMED TO HAVE BEEN RECEIVED RS.4,56,000/ - FROM HIS FATHER SHRI L. ANAND RAO. HIS FATHER APPE ARED BEFORE THE ASSESSING OFFICER AND IN HIS STATEMENT RECORDED ON 19.2.2011 U/S.131 OF THE ACT ADMITTED THE FACT OF HAVING GIVING CASH GIFT OF RS.4,56,00/ - TO HIS SON (ASSESSEE) DURING THE FINANCIAL YEAR 2008 - 09 OUT OF HIS AGRICULTURAL INCOME. IN SUPPORT OF THE SAME, HE FILED A CERTIFICATE FROM THE TAHASILDAR, PADMAPUR VIDE CERTIFICATE NO.1799 DATED 4.1.2012, WHEREIN, IT WAS STATED THAT HE EARNED AGRICULTURAL INCOME OF RS.3,15,000/ - AND IT HAS ALSO BEEN STATED IN THE SAID CERTIFICATE THAT THE AGRICULTURAL INCOME PERTAINS TO F.Y 2008 - 09 RELEVANT TO A.Y. 2009 - 2010 DURING WHICH, HE GIFTED RS.4,56,000/ - TO THE ASSESSEE. FURTHER, THE FATHER OF THE ASSESSEE SHRI L ANAND RAO ALSO STATED THAT HE DERIVED AGRICULTURAL INCOME FROM 26.65 ACRES OF LAND WHICH STOOD IN THE NAME OF HIS FATHER L. LAMINARAYANA. 11. I FIND THAT AFTER EXAMINING THE FATHER OF THE ASSESSEE SHRI L.ANAND RAO U/S.131 OF THE ACT, THE ASSESSING OFFICER COULD NOT BRING ON RECORD ANY MATERIAL TO SHOW THAT HE HAS NOT ACTUALLY GIVEN GIFT TO THE ASSESSEE OR THAT HE DID NOT HAVE SOURCE ENOUGH OUT OF WHICH HE COULD HAVE GIVEN THE IMPUGNED GIFT OF MONEY IN QUESTION. I FIND THAT THE FATHER OF THE ASSESSEE SRI L.ANAND RAO DULY APPEARED BEFORE THE ASSESSING OFFICER AND AFFIRMED OF GIVING GIFT IN QUESTION TO THE ASSESSEE AND ALSO PRODUCED BEFORE THE ASSESSING OFFICER EVIDENCE OF OWNING AGRIC ULTURAL LAND BY HIM WHEREFROM THE AGRICULTURAL INCOME EARNED BY 9 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 HIM, OUT OF WHICH , THE GIFT IN QUESTION WAS GIVEN. IN THE ABOVE CIRCUMSTANCES, IN MY CONSIDERED VIEW, THE INITIAL ONUS WHICH WAS UPON THE ASSESSEE UNDER THE LAW WAS DULY DISCHARGED. THEREAFTER, THE ASSESSING OFFICER HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT THE STAT EMENT GIVEN BY THE FATHER OF THE ASSESSEE WAS INCORRECT OR NOT POSSIBLE. THE ASSESSING OFFICER HAS STATED IN THE ASSESSMENT ORDER THAT THE FATHER OF THE ASSESSEE DID NOT HAVE THE CAPACITY TO GIVE GIFT TO THE ASSESSEE. I FIND THAT IN SUPPORT OF THE CAPACI TY TO GIVE THE GIFT TO THE ASSESSEE, HE FILED EVIDENCE OF OWNING AGRICULTURAL LAND AND ALSO A CERTIFICATE FROM THE TAHASILDAR, PADMAPUR DATED 4.1.2012, WHEREIN, IT WAS STATED THAT HE EARNED AGRICULTURAL INCOME OF RS.3,15,000/ - DURING THE FINANCIAL YEAR 200 8 - 09 RELEVANT TO ASSESSMENT YEAR 20 0 9 - 2010 WHEN THE GIFT WAS GIVEN TO THE ASSESSEE. IN THE ABOVE CIRCUMSTANCES, I FAIL TO APPRECIA TE HOW THE ASSESSING OFFICER STATE D THAT SHRI L. ANAND RAO, FATHER OF THE ASSESSEE DID NOT HAVE THE CAPACITY TO GIVE GIFT OF RS.4,56,000/ - TO THE ASSESSEE. AFTER EXAMINING THE EVIDENCE PRODUCED BY THE FATHER OF THE ASSESSEE, T HE ASSESSING OFFICER COULD NOT BRING ANY POSITIVE MATERIAL ON RECORD TO SHOW THAT FROM AGRICULTURAL LAND POSSESSED BY THE FATHER OF THE ASSESSEE SHRI L. A NAND RAO, HE COULD NOT HAVE EARNED SO MUCH OF AGRICULTURAL INCOME OUT OF WHICH RS.4,56,00/ - COULD NOT HAVE BEEN GIVEN AS GIFT TO THE ASSESSEE. 12. THE ASSESSING OFFICER HAS MERELY STATED THAT THE FATHER OF THE ASSESSEE HAD MEAGRE INCOME WITHOUT BRING ON RECORD ANY MATERIAL IN SUPPORT OF THE 10 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 ISSUE. IN MY CONSIDERED OPINION, SUCH A VAGUE AND UNSPECIFIC AND UNSUBSTANTIATED OBSERVATION HAS NO VALUE IN THE EYES OF LAW. THEREFORE, CONSIDERING THE ENTIRETY OF THE FACTS AND C IRCUMSTANCES OF THE CASE I F IND THAT THE PLAUSIBLE EXPLANATION OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER MERELY ON THE BASIS OF SUSPICION AND DOUBT AND WITHOUT BRINGING EVEN AN IOTA OF MATERIAL ON RECORD AND EVEN POINTING OUT ANY INCONSISTENCY IN THE STATEMENT OF SHRI L. ANAND RAO, FATHER OF THE ASSESSEE RECORDED U/S.131 OF THE ACT. MY ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SREELEKHA BANERJEE VS CIT (1963) 49 ITR 112 (SC), WHEREIN, IT WAS HELD THAT T HE DEPARTMENT CANNOT BY MERELY REJECTING UNREASONABLY A GOOD EXPLANATION CONVERT GOOD PROOF INTO NO PROOF. THEREFORE, IN MY CONSIDERED OPINION, THE ORDER OF THE ASSESSING OFFICER CANNOT BE SUSTAINED AND THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE SA ME. I, THEREFORE, SETASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.4,56,000/ - IN ISSUE. THUS, THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 13. IN SECOND GROUND OF APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT LD CIT(A) ER RED IN CONFIRMING THE ADHOC DISALLOWANCE OF RS.47,180/ - MADE BY THE ASSESSING OFFICER. 11 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 14. BEFORE ME, LD A.R. DID NOT MAKE ANY SERIOUS ARGUMENTS ON THIS GROUND. THEREFORE, THE SAME IS DISMISSED FOR WANT OF PROSECUTION. 15. IN THE RESULT, THE APPEAL FILED B Y THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 10 /01/2017 IN THE PRESENCE OF PARTIES. ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 10 /01 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : LADI SRINIVAS RAO, PROP. MAA BAISHNO DEVI MODERN RICE MILL, AT/PO: GUMUDA, DIST: RAYAGADA. 2. THE RESPONDENT. ITO, RAYAGADA WARD, RAYAGADA 3. THE CIT(A) BERHAMPUR 4. CIT , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY// 12 ITA NO. 394/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 DATE INITIA L 1. DRAFT DICTATED ON 10 /01/17 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 10 /01/11 (DICTATION PAD HAS BEEN ENCLOSED ALONG WITH ORIGINAL FILE) SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS /PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE H.C. 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER.