I am really embarrassed to find this out, but the problem was related to adblocker app. The gingerbread phone had adblocker app, but i had uninstalled it. What i didn't know was that even if its uninstalled, the hosts files are changed and we need to revert it back to original one by disabling adblocker again. That was really stupid of me :(
Now ads are displayed properly. Thanks to everyone who took trouble to help me out. :)