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2017 (1) TMI 781 - ITAT CUTTACK

2017 (1) TMI 781 - ITAT CUTTACK - TMI - Addition u/s.68 - received of alleged gift given by father - Held that:- Assessing Officer has merely stated that the father of the assessee had meagre income without bring on record any material in support of the 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 circumstances of the case I find that the plausible explanation of .....

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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 same. Therefore, setaside the orders of lower authorities and delete the addition - Decided in favour of assessee - ITA No. 394/CTK/2014 - Dated:- 1-1-2017 - Shri N. S. Saini, Accountant Member Assessee by : Shri J.M.Pattnaik, AR Revenue by : Shri D.K.Pradhan, DR ORDER This is an appeal filed by the assessee against the order of CI .....

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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 confirming the action of the Assessing Officer in making addition of ₹ 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 .....

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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 donor to make cash gift of ₹ 4,56,000/- on 10.12.2008 and genuineness of transaction. The assessee 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 .....

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rmatory 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 ₹ 4,56,000/- on 10.12.2008 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 ₹ 4,56,000/-. He wanted an opportunity t .....

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d 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 ₹ 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 income from agriculture .....

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ring which the agricultural income was only ₹ 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, it 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 inabilit .....

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from 26.65 acres of land stood in the name of his father L Laxminarayana. However, on going through the land document filed, 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 Ramulu is brother of his father and no documentary partition of the l .....

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ning in his village Derigaon. In support of his claim, he filed a letter form the derigaon Gram Panchayat 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 nearest 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 e .....

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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 maintains the bank account with SBI, Gunupur, Dist Rayagada and nothi .....

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n 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 ₹ 4,56,000/- being gifted to the appellant. The said donor has admitted the fact of the said gift before the AO and submitt .....

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g remand does not specify the year to which such agricultural income relate to. Ld CIT(A) presumed that the said agricultural income of ₹ 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 regarding the agricultural income during the relevant financial year despite the specific request by the Assessing officer. He observed th .....

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sed 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 Assessing Officer in compliance of the summons issued u/s.131 and evidence of their ownership of agricultural lands to prove the .....

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fact of having giving cash gift of ₹ 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 ₹ 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 S .....

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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 agricultural land by him wherefrom the agricultural income earned by 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 .....

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.2012, wherein, it was stated that he earned agricultural income of ₹ 3,15,000/- during the financial year 2008-09 relevant to assessment year 2009-2010 when the gift was given to the assessee. In the above circumstances, I fail to appreciate how the Assessing Officer stated that Shri L. Anand Rao, father of the assessee did not have the capacity to give gift of ₹ 4,56,000/- to the assessee. After examining the evidence produced by the father of the assessee, the Assessing Officer co .....

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