SATISH BABLADI, MUMBAI V. DCIT CEN CIR 36, MUMBAI

ITA 345/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2458 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2004-2005
• Appeal Filed On: 13-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU JIT BANGAR
• Assessee Lawyers: V C SHAH
• Keywords: Gift; Bonafide belief; Difference of opinion; Avoidance of tax; Capital receipt
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS.345 & 346/M/2015 ASSESSMENT YEARS: 2004-05 & 2006-07 MR. SATISH BABLADI, 404, AKRUTI ARCADE, J.P. ROAD, OPP. WADIA SCHOOL, ANDHERI (WEST), MUMBAI 400 053 PAN: AAIPB8946N VS. DCIT, CENTRAL CIRCLE-36, AAYAKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI V.C. SHAH, A.R. REVENUE BY : SHRI SUJIT BANGAR, D.R. DATE OF HEARING : 27.07.2016 ITA NOS.343 & 344/M/2015 ASSESSMENT YEARS: 2001-02 & 2004-05 SMT. ASHA BABLADI, A-16, NAVSHILPAVANI CHS, LALLUBHAI PARK ROAD NO.1, VILLE PARLE (WEST), MUMBAI 400 056 PAN: AGSPB1432B VS. DCIT, CENTRAL CIRCLE-36, AAYAKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI V.C. SHAH, A.R. REVENUE BY : SHRI SUJIT BANGAR, D.R. DATE OF HEARING : 28.07.2016 DATE OF PRONOUNCEMENT : 28.07.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CAPTIONED APPEALS IN THE CASE OF ASSESSE E MR. SATISH BABLADI HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST TWO SEP ARATED ORDERS DATED 25.09.2014 & 10.05.2011 OF THE COMMISSIONER OF INCO ME TAX (APPEALS) ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 2 [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2004-05 & 2006-07 RESPECTIVELY. WHEREAS THE APPEALS PREFERRE D BY SMT. ASHA BABLADI ARE AGAINST TWO SEPARATE ORDERS OF LD. CIT(A) OF EVEN D ATE 25.09.2014 RELEVANT TO A.Y. 2001-02 AND 2004-05 IN RELATION TO ASSESSMENT ORDERS PASSED UNDER SECTION 143(3) OF THE ACT. BOTH THE ASSESSEES ARE CLOSELY RELATED BEING SON AND MOTHER. THE APPEALS IN THE CASE OF MR. SATISH BABL ADI WERE HEARD ON 27.07.16 WHEREAS IN THE CASE OF SMT. ASHA BABLADI WERE HEARD ON 28.07.16. SINCE THE FACTS INVOLVED IN ALL THE ABOVE CAPTIONED APPEALS A RE IDENTICAL, HENCE THE SAME ARE TAKEN TOGETHER FOR DISPOSAL BY THIS COMMON ORDE R. 2. THE ISSUE RAISED IN ALL THE APPEALS IS RELATING TO THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. FIRST WE TAKE UP THE ASSESSEE MR. SATISH BABLADIS APPEAL FOR A.Y. 2004-05 IN ITA NO. 345/M/2015. ITA NO.345/M/2015 FOR A.Y. 2004-05 3. IN THIS CASE, THE PENALTY AGGREGATING OF RS.2,21 ,443/- HAD BEEN LEVIED BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS T HE AO) UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF FOLLOWING DISALL OWANCES/ADDITIONS. A. CAPITAL RECEIPT OF RS.500000/- CLAIMED TO BE RE CEIVED AS GIFT. B. EXPENSES DEDUCTIBLE OF RS.43832/- C. INCOME TREATED AS UNDERSTATED OF RS.45081/- D. SHORT TERM CAPITAL GAIN OF RS.114763/- 4. THE LD. CIT(A) CONFIRMED THE PENALTY SO LEVIED B Y THE AO. THE ASSESSEE, THUS, HAS COME IN APPEAL BEFORE US. 5. THE LD. A.R. OF THE ASSESSEE HAS MADE HIS SUBMIS SIONS REGARDING THE EXPLANATION OF THE ASSESSEE RELATING TO THE ABOVE A DDITIONS MADE BY THE AO AND HAS FURTHER CONTENDED THAT THE LEVY OF PENALTY UNDE R SECTION 271(1)(C) OF THE ACT IN RELATION TO THE ABOVE STATED ADDITIONS WAS N OT JUSTIFIED. THE LD. D.R., ON THE OTHER HAND, HAS RELIED UPON T HE FINDING OF THE LOWER AUTHORITIES. ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 3 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. SO FAR AS THE PENALTY ON ACCOUNT OF ADDIT IONS OF RS.5 LAKHS CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE AS GIFT FROM HIS FRIEND IS CONCERNED, THE LD. A.R. OF THE ASSESSEE HAS EXPLAINED THAT THE ASSESSE E HAD PRODUCED ALL THE INFORMATION RELATING TO DONOR VIZ. HIS NAME, ADDRES S AND PAN NUMBER, COPY OF DECLARATION OF GIFT, COPY OF RETURNS, AND FILING OF ACCOUNTS BY THE DONOR WITH THE INCOME TAX AUTHORITIES. HE HAS FURTHER SUBMITTED T HAT IT WAS ALSO EXPLAINED TO THE LOWER AUTHORITIES THAT THE DONOR WAS ASSESSED T O TAX, HIS IDENTITY WAS ESTABLISHED AND THAT THERE WAS NO REASON TO DISBELI EVE THE TRANSACTION WHICH HAS BEEN CARRIED OUT THROUGH THE BANKING CHANNEL AND WA S SUPPORTED WITH THE CONFIRMATION OF THE DONOR. HOWEVER, THE AO DISBELI EVED THE TRANSACTION OBSERVING THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE CREDITWORTHINESS OF THE DONOR AND THE GENUINENESS OF THE GIFT. 7. IN THE QUANTUM PROCEEDINGS, THE MATTER TRAVELLED BEFORE THE TRIBUNAL. THE LD. A.R. HAS INVITED OUR ATTENTION TO THE ORDER OF THE TRIBUNAL DATED 19.03.13 PASSED IN ITA NOS.1732 & 2109/M/2010 IN RE LATION TO THE QUANTUM ADDITIONS. 8. WE FIND THAT THE TRIBUNAL HAS UPHELD THE ADDITIO N IN RELATION TO THE TRANSACTION OF GIFT, NOT BECAUSE THAT THE CLAIM OF THE ASSESSEE HAS BEEN DISPROVED BY THE AO, BUT, ONLY ON THE BASIS OF THE ASSUMPTION THAT A PERSON HAVING AN ANNUAL AVERAGE INCOME OF RS.1.50 LAKHS TO 1.70 LAKHS WAS NOT SUPPOSED TO MAKE A GIFT OF RS.5 LAKHS TO HIS FRIEND WITHOUT ESTABLISHING THAT THE SAID FRIEND WAS IN IMMEDIATE NEED OF SUCH FUND. AS DISCUSSED ABOVE, THE ASSESSEE HAD PRODUCED THE EVIDENCE WHICH WAS IN HIS POSSESSION TO PROVE THE CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF TH E TRANSACTION. MERELY BECAUSE THE AO INSISTED THE ASSESSEE TO BRING MORE EVIDENCE AND THE ASSESSEE COULD NOT PRODUCE THE SAME, AS THE ASSESSEE WAS NOT IN POSSESSION OF THE SAME, THAT ITSELF DOES NOT ESTABLISH THAT THE ASSESSEE HA D FURNISHED INACCURATE PARTICULARS OF INCOME OR THAT HIS CLAIM WAS DISPROV ED. THE ADDITIONS IN THIS ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 4 CASE HAVE BEEN MADE NOT BECAUSE THAT THE AO HAS DIS PROVED THE CLAIM OF THE ASSESSEE OR THE AO HAD BROUGHT ANY FALSEHOOD IN THE EVIDENCES SUBMITTED BY THE ASSESSEE RELATING TO THE GENUINENESS OF THE TRA NSACTION. THE REVENUE COULD NOT PROVE THAT THE CLAIM PUT BY THE ASSESSEE WAS WR ONG OR BOGUS. MERELY BECAUSE THE ADDITIONS HAVE BEEN MADE BY THE AO AND CONFIRMED BY THE TRIBUNAL ON ACCOUNT OF INABILITY OF THE ASSESSEE TO FURNISH MORE EVIDENCES AS REQUIRED BY THE AUTHORITIES TO PROVE THE GENUINENES S OF THE TRANSACTION THAT ITSELF IS NOT SUFFICIENT TO HOLD THAT THE CLAIM OF THE ASSESSEE WAS WRONG, INACCURATE OR THAT THERE WAS ANY CONCEALMENT OF INC OME. THE PENALTY PROCEEDINGS ARE SEPARATE FROM QUANTUM ASSESSMENT PR OCEEDINGS. IN THE CASE OF LEVY OF PENALTY, IT SHOULD BE PROVED ON THE FILE TH AT THE PARTICULARS FURNISHED BY THE ASSESSEE WERE INACCURATE PARTICULARS OF INCOME OR THAT THERE WAS CONCEALMENT OF INCOME. EVERY CASE OF CONFIRMATION OF ADDITION OR DISALLOWANCE CANNOT BE REGARDED AS A CASE OF FURNIS HING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. EV EN IT CANNOT BE SAID THAT THIS CASE OF THE ASSESSEE WAS A CASE OF NO EVIDENCE AT ALL. THE ASSESSEE HAD ALREADY SUBMITTED EVIDENCES IN THE SHAPE OF GIFT DE ED, PAN NUMBER OF THE DONOR, THE BANK STATEMENT REFLECTING THE TRANSACTIO N AND EVEN THE COPY OF THE INCOME TAX RETURNS AND ACCOUNTS OF THE ASSESSEE. T HE EVIDENCES PRODUCED ON THE FILE BY THE ASSESSEE HAVE NOT BEEN PROVED WRONG OR FALSE. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. UPENDRA V . MITHANI IN ITA (L) NO.1860 OF 2009 DECIDED ON 05.08.2009, HAS OBSERVED IN THE MATTER OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, THAT IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED I.E . IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POS ITIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE, THEN NO PENALTY CAN BE IM POSED IN SUCH CASES. WHEN THE FACTS OF THE CASE IN HAND ARE CONSIDERED IN THE LIGHT OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. U PENDRA V. MITHANI (SUPRA), THE LEVY OF PENALTY ON THIS ISSUE CANNOT B E HELD TO BE JUSTIFIED IN THIS CASE. THE SAME IS ACCORDINGLY ORDERED TO BE DELETE D. ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 5 9. NOW COMING TO THE SECOND ISSUE OF DISALLOWANCE O F EXPENSES OF RS.43,832/- IN RELATION TO WHICH THE PENALTY HAS AL SO BEEN LEVIED. THE LD. A.R. OF THE ASSESSEE HAS INVITED OUR ATTENTION TO PAGE 7 OF THE PAPER BOOK TO SHOW THAT THE ASSESSEE, DURING THE YEAR, HAD EARNED RS.4 0,50,000/- BY WAY OF PROFESSIONAL FEES. HE FURTHER, INVITING OUR ATTENT ION TO THE COMPUTATION OF INCOME AND HAS STATED THAT THE ASSESSEE IN THE RETU RN OF INCOME HAD SHOWN THE NET INCOME ON THIS ACCOUNT AT RS.4,06,168/-. HE, I N THIS RESPECT, HAS EXPLAINED THAT THE EXPENSES OF RS.43,832/- WERE INCURRED IN R ELATION TO THE ABOVE INCOME WHICH WERE CLAIMED IN THE COMPUTATION OF INCOME. H OWEVER, THE AO HAS DISALLOWED THE SAME BECAUSE THE ASSESSEE COULD NOT FURNISH THE PROOF REGARDING THE ACTUAL INCURRING OF THE EXPENSES. HE HAS FURTH ER SUBMITTED THAT EVERY EARNING OF INCOME CERTAINLY HAS CORRESPONDING EXPEN DITURE ALSO. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT BEEN MA INTAINING BOOKS OF ACCOUNT AND THAT THE ACCOUNTS SUBMITTED BY THE ASSESSEE WER E THE ROUGH ACCOUNTS NOT PREPARED BY A PROFESSIONAL; THAT THERE WERE CERTAIN MINOR DISCREPANCIES IN THOSE ACCOUNTS; THAT THERE WAS NO CONCEALMENT OF INCOME O R FURNISHING OF INACCURATE PARTICULARS OF INCOME. 10. IN RELATION TO THE ADDITION ON ACCOUNT OF UNDER STATED INCOME OF RS.45,081/-, THE LD. A.R. HAS GIVEN SOMEWHAT IDENTI CAL SUBMISSIONS STATING THAT THIS ADDITION WAS ON ACCOUNT OF DIFFERENCE IN SOME FIGURES NOTICED AS THE ASSESSEE WAS NOT MAINTAINING ANY REGULAR BOOKS OF A CCOUNTS. HENCE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT RECONCILE EACH AND EVERY AMOUNT THAT WAS NOT A CASE OF ANY CONCEALMENT OF IN COME OR AVOIDANCE OF TAX BUT ONLY BECAUSE OF THE INABILITY OF THE ASSESSEE T O RECONCILE SOME FIGURES. REGARDING THE ADDITION OF RS.1,14,763/- ON ACCOUNT OF INCOME FROM SHORT TERM CAPITAL GAINS, THE LD. A.R. HAS EXPLAINED THAT THE SAID INCOME HAD ACCRUED TO THE ASSESSEE ON ACCOUNT OF REDEMPTION OF UNITS IN M UTUAL FUNDS. HE HAS EXPLAINED THAT THE ASSESSEE HAD INVESTED THE MONIES IN MUTUAL FUNDS WHICH WERE DISCLOSED IN THE ACCOUNTS MAINTAINED AND THAT THE SOURCE OF INVESTMENTS ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 6 WAS FULLY EXPLAINED. HOWEVER, AS ADVISED BY THE MU TUAL FUND ADVISOR, THE ASSESSEE OPTED TO RESHUFFLE SOME SCHEMES OF MUTUAL FUNDS. THE FUNDS RECEIVED FROM SOME SCHEMES ON REDEMPTIONS WERE FURTHER INVES TED IN SOME OTHER SCHEME OF MUTUAL FUNDS OF THE SAME ORGANIZATIONS. THAT THE ASSESSEE WAS UNDER IMPRESSION THAT AS THE FINAL REALIZATION WOUL D BE BEYOND THE PRESCRIBED LIMIT OF EXEMPTION, THEREFORE NO TAX WAS ATTRACTED. THE ASSESSEE WAS ILL- ADVISED BY THE MUTUAL FUND ADVISOR THAT AS THE INVE STMENTS CONTINUED AND THEREFORE THERE WAS NO LIABILITY OF TAX. THE LD. A .R. HAS FURTHER SUBMITTED THAT WHEN THE MATTER WAS POINTED OUT TO THE ASSESSEE, TH E ASSESSEE IMMEDIATELY AGREED FOR THE SAID ADDITIONS AND HAS NEVER CONTEST ED THE SAID ADDITIONS BY WAY OF APPEAL. CONSIDERING THE ABOVE SUBMISSIONS OF TH E LD. A.R. AND SMALLNESS OF AMOUNTS INVOLVED AND ALSO THAT THE ASSESSEE WAS NOT MAINTAINING THE ACCOUNTS AND THAT THE DISALLOWANCES RELATING TO THE CLAIM OF EXPENDITURE OF RS.43,832/- AND UNDER STATEMENT OF INCOME OF RS.45,081/- WERE N OT ON ACCOUNT OF INACCURATE PARTICULARS OF INCOME BUT DUE TO THE REA SON THAT THE ASSESSEE COULD NOT FURNISH THE REQUIRED EVIDENCES/RECONCILIATION D URING THE ASSESSMENT PROCEEDINGS, WE DO NOT FIND IT TO BE A CASE FOR LEV Y OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 11. THE THIRD DISALLOWANCE RELATING TO THE NON OFFE RING OF THE INCOME FROM SHORT TERM CAPITAL GAINS, THE ASSESSEE HAS EXPLAINE D THAT HE WAS UNDER BONAFIDE BELIEF THAT THE SAID GAIN WAS NOT ATTRACTED TO TAX. THE EXPLANATION GIVEN BY THE ASSESSEE IN RESPECT TO THE DISALLOWANCE OF EXPENDIT URE UNDERSTATEMENT OF INCOME AND ADDITION ON ACCOUNT OF SHORT TERM CAPITA L GAIN SEEMS TO BE PLAUSIBLE. THE FACTS OF THE CASE DO NOT SUGGEST TH AT THERE WAS ANY INTENTION ON THE PART OF THE ASSESSEE TO FURNISH INACCURATE PART ICULARS OF INCOME OR TO CONCEAL HIS INCOME. 12. WE, THEREFORE, DO NOT FIND JUSTIFICATION ON THE PART OF LOWER AUTHORITIES IN LEVYING/CONFIRMING THE PENALTY ON THESE ISSUES ALSO . IN VIEW OF OUR ABOVE DISCUSSION, THE PENALTY LEVIED BY THE LOWER AUTHORI TIES UNDER SECTION 271(1)(C) ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 7 OF THE ACT IN RELATION TO THE ABOVE STATED DISALLOW ANCES, IS HEREBY ORDERED TO BE DELETED. 13. NOW COMING TO THE ASSESSEE MR. SATISH BABLADIS APPEAL BEARING ITA NO.346/M/2015 FOR A.Y. 2006-07. ITA NO.346/M/2015 FOR A.Y. 2006-07 14. THE PENALTY IN THIS CASE HAS BEEN LEVIED UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF DIFFERENCE OF OPINION AS TO WHETH ER THE COMPENSATION OF AMOUNT OF RS.6 LAKHS RECEIVED BY THE ASSESSEE WAS E XIGIBLE TO CAPITAL GAINS TAX IN A.Y. 2006-07 OR IN A.Y. 2007-08. THE LD. A.R. O F THE ASSESSEE, AT THE OUTSET, HAS BROUGHT OUR ATTENTION TO THE DECISION O F THE CO-ORDINATE BENCH OF THE TRIBUNAL DATED 10.06.14 IN THE CASE OF THE MOTHER O F THE ASSESSEE IN ITA NOS.1733, 1734 & 2110/M/2010. THE LD. A.R. OF THE ASSESSEE HAS EXPLAINED THAT THE ASSESSEE ALONG WITH HIS MOTHER HAD RECEIVE D THE ABOVE STATED COMPENSATION IN THE SAME TRANSACTION. THE MATTER R ELATING TO THE LEVY OF PENALTY ON THIS ISSUE WAS CONSIDERED BY THE TRIBUNA L AND IT WAS HELD BY THE TRIBUNAL THAT THIS WAS NOT A CASE OF CONCEALMENT OF INCOME. IT WAS ONLY A CASE OF DIFFERENCE OF OPINION AS THE AO HAD TAKEN THE VI EW THAT TRANSFER OF ASSET WAS IN A.Y. 2006-07 AND THAT CAPITAL GAINS WERE ALSO AS SESSABLE IN A.Y. 2006-07. WHEREAS, IN VIEW OF THE ASSESSEE, SINCE THE POSSESS ION HAD BEEN TAKEN IN THE FINANCIAL YEAR 2006-07 RELEVANT TO A.Y. 2007-08, TH EREFORE AMOUNT OF CAPITAL GAIN WAS ASSESSABLE IN A.Y. 2007-08 AND THE ASSESSE E HAD ALSO OFFERED THE SAME IN A.Y. 2007-08. THE TRIBUNAL, CONSIDERING TH E FACTS, HAS HELD THAT IT WAS A CASE OF DIFFERENCE OF OPINION AND THAT THE ISSUE WAS A DEBATABLE ISSUE BUT THERE WAS NO CONCEALMENT OF PARTICULARS OF INCOME O R FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL THEREFORE DELE TED THE PENALTY RELATING TO THE SIMILAR TRANSACTION IN THE CASE OF THE MOTHER O F THE ASSESSEE NAMELY SMT. ASHA LAXMIKANT BABLADI. SINCE THE FACTS OF THE CAS E OF THE ASSESSEE ARE IDENTICAL AND ARE RELATING TO THE SAME TRANSACTION, HENCE RESPECTFULLY FOLLOWING THE ABOVE CITED DECISION OF THE CO-ORDINATE BENCH O F THE TRIBUNAL, WE HOLD THAT ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 8 THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS N OT LEVIABLE ON THIS ISSUE IN THE CASE OF THE ASSESSEE ALSO. 15. IN VIEW OF OUR FINDINGS GIVEN ABOVE, BOTH THE A PPEALS OF THE ASSESSEE MR. SATISH BABLADI ARE HEREBY ALLOWED. 16. NOW COMING TO THE APPEALS OF THE ASSESSEE SMT. ASHA BABLADI BEARING ITA NO.343/M/2015 FOR A.Y. 2001-02. ITA NO.343/M/2015 FOR A.Y. 2001-02 17. IN THIS APPEAL, THE ASSESSEE HAS AGITATED THE C ONFIRMATION OF THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON ACCOU NT OF THE FOLLOWING ADDITIONS: A. CAPITAL RECEIPT BEING GIFT RECEIVED OF RS.10000 00/-. B. ADDITION OF RS.10200/- ON ACCOUNT OF UNDISCLOSED BANK BALANCE THOUGH FULL EXPLANATION WAS GIVEN TO CLARIFY THAT T HERE WAS NO CONCEALMENT PARTICULARLY WHEN THERE WAS CAPITAL REC EIPT AND ALL EVIDENCES WERE FILED. 18. SO FAR AS THE LEVY OF PENALTY IN RELATION TO TH E ADDITION OF RS.10 LAKHS CLAIMED AS GIFT BY THE ASSESSEE IS CONCERNED, THE F ACTS ARE ALMOST IDENTICAL TO THAT OF THE CASE OF THE SON OF THE ASSESSEE I.E. MR . SATISH BABLADI EXCEPT THAT THE RECIPIENT AND DONOR ARE DIFFERENT PERSONS. THE LD. A.R. HAS DEMONSTRATED THAT THE ASSESSEE HAD PRODUCED ALL THE DETAILS SUCH AS N AME AND PAN NUMBER OF THE DONOR SMT. MAMTA V. SINGHAVI, ADDRESS OF THE DONOR, CONFIRMATION OF GIFT, COPY OF DOCUMENTS EVIDENCING GIFT, BANK STATEMENT S HOWING PAYMENT BY CHEQUE OF THE GIFT AMOUNT, COPY OF RETURN OF INCOME AND FINAL ACCOUNTS FILED BY THE DONOR WITH THE INCOME TAX AUTHORITIES. 19. WE HAVE ALREADY DISCUSSED ABOVE IN THE CASE OF THE ASSESSEE MR. SATISH BABLADI THAT IT CANNOT BE SAID TO BE A CASE OF FURN ISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. HE NCE, IN VIEW OF OUR FINDINGS GIVEN ABOVE, WE HOLD THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY UNDER ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 9 SECTION 271(1)(C) OF THE ACT AND HENCE THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. 20. THE SECOND ISSUE UPON WHICH THE PENALTY HAS BEE N LEVIED ON ACCOUNT OF ADDITION OF RS.10200/- ON ACCOUNT OF UNDISCLOSED BA NK BALANCE. IN THIS RESPECT, THE LD. A.R. OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE WAS HOLDING ONLY ONE BANK ACCOUNT WHICH WAS FULLY DISCLOSED TO THE R EVENUE AUTHORITIES. THE ASSESSEE EXPLAINED THAT IT WAS NOT THE CASE OF FURN ISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. IT WAS JUST A SIMPLE ACCOUNTING ERROR. 21. CONSIDERING THE SMALLNESS OF THE AMOUNT AND ALS O CONSIDERING THAT THE ASSESSEE HAS FULLY DISCLOSED HER BANK ACCOUNT TO TH E REVENUE AUTHORITIES BUT DUE TO SOME MISTAKE IT COULD NOT MATCH THE BANK BAL ANCE ALONG WITH ACCOUNTS, WE DO NOT THINK THAT IT IS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. 22. IN VIEW OF OUR ABOVE FINDINGS, THIS APPEAL OF T HE ASSESSEE IS ALLOWED AND THE PENALTY LEVIED UNDER SECTION 271(1)(C) IS HEREB Y ORDERED TO BE DELETED. 23. NOW COMING TO THE APPEAL OF THE ASSESSEE SMT. A SHA BABLADI BEARING ITA NO.344/M/2015 FOR A.Y. 2004-05. ITA NO.344/M/2015 FOR A.Y. 2004-05 24. IN THIS CASE THE PENALTY UNDER SECTION 271(1)(C ) OF THE ACT HAS BEEN LEVIED ON ACCOUNT OF THE FOLLOWING ADDITIONS: (A) SHORT TERM CAPITAL GAIN ON REDEMPTION OF MUTUAL FUNDS OF RS.2,53,690/-. (B) LONG TERM CAPITAL GAIN ON REDEMPTION OF MUTUA L FUNDS OF RS.1847/-. (C) CAPITAL RECEIPT BEING GIFT RECEIVED OF RS.7,5 0,000/- THOUGH FULL EXPLANATION WAS GIVEN TO CLARIFY THAT THERE WAS NO CONCEALMENT. ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 10 25. SO FAR AS THE ADDITIONS IN RELATION TO THE POIN T (A) & (B) ARE CONCERNED, THE LD. A.R. OF THE ASSESSEE HAS SUBMITTED THAT THE FACTS ARE IDENTICAL TO THAT OF CASE OF THE ASSESSEE MR. SATISH BABLADI. IT HAS BE EN SUBMITTED THAT IT WAS NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INC OME OR CONCEALMENT OF INCOME BUT THE CAPITAL GAINS WERE NOT OFFERED BECAU SE OF THE FACT THAT THE ASSESSEE WAS OF THE BELIEF THAT THE SINCE THE INVES TMENTS WERE FURTHER MADE, HENCE THE RESULTANT SHORT TERM CAPITAL GAINS WERE N OT TAXABLE DURING THE YEAR. IT HAS BEEN FURTHER EXPLAINED THAT IN RELATION TO THE AMOUNT WHICH WAS NOT REINVESTED, THE CORRESPONDING SHORT TERM CAPITAL GA IN OF RS.142249/- WERE OFFERED FOR TAXATION BUT THE AO FAILED TO TAKE NOTE OF THE SAME. IN VIEW OF OUR OBSERVATIONS MADE ABOVE WHILE ADJUDICATING THE APPE AL OF THE SON OF THE ASSESSEE NAMELY MR. SATISH BABLADI, WE ARE OF THE V IEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN VIEW OF THIS, THE PENALTY LEVIED IN RELATION TO THE ADDITIONS MADE UN DER HEADING (A) & (B) ARE HEREBY ORDERED TO BE DELETED. 26. SO FAR AS THE ADDITION UNDER POINT (C) IN RELAT ION TO GIFT IS CONCERNED, THE FACTS ARE IDENTICAL AND THE ISSUE HAS ALREADY BEEN DISCUSSED ABOVE IN THE CASE OF THE SON OF THE ASSESSEE MR. SATISH BABLADI, AND IN VIEW OF OUR FINDINGS GIVEN ABOVE, WE HOLD THAT PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT ATTRACTED ON THIS ISSUE ALSO. 27. IN THE RESULT, ALL THE CAPTIONED 4 APPEALS OF T HE ASSESSEES ARE HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.07.2016. SD/- SD/- (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 28.07.2016. * KISHORE, SR. P.S. ITA NO.345/M/2015 & ITA NOS.343 & 344/M/2015 MR. SATISH BABLADI & SMT. ASHA BABLADI 11 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.