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Issues Involved:
1. Genuineness of the gifts received by the assessee. 2. Burden of proof regarding the nature and source of credits u/s 68 of the IT Act. 3. Role and responsibility of the AO in examining the donors. Summary: 1. Genuineness of the Gifts: The assessee, an individual deriving income under the head 'Salary' and from business, credited Rs. 11,00,000 in his capital account as gifts received from 10 different persons during the reassessment proceedings u/s 147 for the asst. yr. 1999-2000. The AO questioned the genuineness of these gifts, noting that the donors were not related to the assessee, there was no occasion for the gifts, and the donors had low income levels. The AO concluded that the gifts were not genuine and added the amount as income u/s 68 of the Act. 2. Burden of Proof: The CIT(A) deleted the addition made by the AO, noting that the assessee had provided sufficient evidence, including gift deeds, income-tax particulars, and affidavits from the donors. The CIT(A) held that the AO had rejected the assessee's plea without any material evidence. The Revenue argued that the CIT(A) did not consider the various circumstances pointed out by the AO and relied on several judicial pronouncements to support their stance. 3. Role and Responsibility of the AO: The Tribunal emphasized that the AO has the power to issue summons u/s 131 of the IT Act to examine the donors. The AO failed to utilize this power and instead relied on mere suspicion. The Tribunal referred to the decision in CIT vs. Orissa Corporation (P) Ltd., where it was held that without pursuing summons to examine creditors, the AO cannot draw adverse inferences. The Tribunal concluded that the AO's conclusions were based on surmises and not on concrete evidence. Conclusion: The Tribunal upheld the CIT(A)'s decision to delete the addition made by the AO, stating that the AO did not fulfill his duty to examine the donors and relied on mere suspicion. The appeal by the Revenue was dismissed.
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