, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) . . , , ./ I.T. A. NO. 5515 / MUM/20 1 2 ( / ASSESSMENT YEAR : 20 0 4 - 05 ) MR.RAMESH P.GAJANI, E - 809, ROYAL SAMRAT CHS LTD, S V ROAD, GOREGAON(W), MUMBAI - 400062 / VS. INCOME TAX OFFICER - 24(3)(4), C - 11, 4 TH FLOOR, PRATYAKSHAKAR BHAVAN, BBKC, BANDRA (E) , MUMBAI - 400051 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AAEPG9990P ./ I.T.A. NO. 5516 /MUM/20 12 ( / ASSESSMENT YEAR : 2004 - 05 ) MR.RAMESH P.GAJANI,HUF, E - 809, ROYAL SAMRAT CHS LTD, S V ROAD, GOREGAON(W), MUMBAI - 400062 / VS. INCOME TAX OFFICER - 24(3)(4), C - 11, 4 TH FLOOR, PRATYAKSHAKAR BHAVAN, BBKC, BANDRA (E), MUMBAI - 400051 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GI R NO. : AAFHR9402N / A SSESSEES BY SHRI V .C SHAH / RE VENUE BY SHRI AKHILENDRA P YADAV / DATE OF HEARING : 23.3 . 201 5 / DATE OF PRONOUNCEMENT : 31 .3. 201 5 / O R D E R PER B.R. BASKARAN (AM) BOTH THE APPEALS FILED BY THE RESPECTIVE ASSESSEES ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS DATED 29.06. 201 2 PASSED BY LD CIT(A) - 3 4 , I.T.A. NO. 5515 & 5516 / MUM/201 2 2 MUMBAI AND THEY RELATE TO THE ASSESSMENT YEAR 200 4 - 05 . BOTH T HE ASSESSEE S ARE AGGRIEVED BY THE DECISION OF LD . CIT(A) IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT ) . 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. BOT H THE PARTIES HAD RECEIVED GIFT OF RS.5 LAKHS EACH D URING THE YEAR UNDER CONSIDERATION . SHRI RAMESH P GAJANI HA D RECEIVED GIFT OF FROM ONE SHRI HASMUKH K MEHTA OF SURAT AND SHRI RAMESH P GAJANI, HUF HA D RECEIVED GIFT FROM SHRI BHANJIBHAI MULJIBHAI SHETH OF SURAT. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS , THE AO CALLED FOR VARIOUS DETAILS IN ORDER TO VERI F Y THE GENUINENESS OF GIFT. HOWEVER, BOTH THE ASSESSEES FILED DETAILS THAT WERE AVAILABLE WITH THEM , BUT THEY COULD NOT EITHER FURNISH ANY OTHER DETAILS OR PRODUCE THE DONORS BEFORE THE AO. HENCE, THE AO DISBELIEVED THE GENUINENESS OF GIFT S AND ACCORDINGLY ASSESSED THE SAME IN THE HANDS OF BOTH THE ASSESSEES . IT IS PERTINENT TO NOTE THAT BOTH THE ASSESSEE S ACCEPTED THE SAID ASSESSMENT , BUT NOT FILING APPEAL . SUBSEQUENTLY, THE AO LEVIED THE PENALTY U/ S 271(1)(C) OF THE ACT AND THE SAME WAS CONFIRMED BY THE LD. CIT(A). AGGRIEVED, BOTH THE ASSESSEES HAVE FILED THESE APPEALS BEFORE US. 3. THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT BOTH THE ASSESSEES HAVE RECEIVED GIFT S BY WAY OF CHEQUE. HE SUBMITTED THAT THE ASSESSEES, DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, HAVE FILED COPIES OF I NDENTURE OF GIFT, INCOME TAX RETURN S FURNISHED BY THE DONORS , COPY OF BANK ACCOUNTS . FURTHER, THE ASSESSEES COULD NOT COMPEL THE DONORS TO APPEAR BEFORE TH E AO, AS THEY DID NOT OBLIGE THE ASSESSEES. HENCE BOTH THE ASSESSEES WERE CONSTRAINED TO ACCEPT THE ASSESSMENT OF GIFTS AS THEIR RESPECTIVE INCOME. THE LD. COUNSEL FURTHER SUBMITTED THAT THE AO HAS NOT PROVED THE GIFT RECEIPTS AS BOGUS, BUT TREATED THE SA ME AS INCOME OF THE ASSESSEES ON ACCOUNT OF DIFFERENCE OF OPINION ONLY. ACCORDINGLY HE I.T.A. NO. 5515 & 5516 / MUM/201 2 3 SUBMITTED THAT THE ASSESSEES HAVE NOT CONCEALED ANY INCOME AND HAVE ALSO FURNISHED ALL THE PARTICULARS RELATING TO THE RECEIPT OF GIFTS. HE FURTHER SUBMITTED THAT THE E XPLANATIONS FURNISHED BY THE ASSESSEE WERE NOT FOUND TO BE FALSE. ACCORDINGLY, HE SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY THE AO . 5. ON THE OTHER HAND, THE LD.DR VEHEMENTLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. HAVING REGARDS TO THE RIVAL CONTENTIONS , WE ARE OF THE VIEW THAT THE RE IS A MERIT IN THE CONTENTION OF THE LD. AR . A S POINTED OUT BY THE LD. AR, THE AO HAS NOT PROVED THE GIFT S TO BE BOGUS ONE S . THE ASSESSEES HAVE FILED ALL THE AVAILABLE DETAI LS TO THE AO, VIZ ., INDENTURE OF GIFT, COPIES OF RETURN OF DONORS, COPIES OF BANK ACCOUNT IN ORDER TO PROVE THE GENUINENESS OF GIFT. THOSE DOCUMENTS WERE ALSO NOT FOUND TO BE FALSE BY THE AO. SINCE THE ASSESSEE S COULD NOT PRODUCE DONOR S AND COULD NOT FU RNISH FURTHER DETAILS THAT WERE CALLED FOR BY THE AO, THESE GIFTS WERE ASSESSED AS INCOME OF THE ASSESSEES. IT IS PERTINENT TO NOTE THAT THE ASSESSEES HAVE ACCEPTED THE SAME BY NOT PREFERRING FURTHER APPEALS. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE ASSESSEE S HAVE FURNISHED ALL THE INFORMATION AVAILABLE WITH THEM , WHICH HAVE NOT BEEN FOUND TO BE FALSE. FURTHER, THE EXPLANATIONS OF THE ASSESSEE IN THIS REGARD WERE ALSO NOT FOUND TO BE FALSE. UNDER THESE OF SET OF FACTS, WE ARE OF THE VIEW, T HE PENALTY U/S 271(1)(C ) OF THE ACT IS NOT EXIGIBLE IN THE INSTANT CASES . ACCORDINGLY , WE SET ASIDE THE ORDER OF LD. CIT(A) PASSED IN THE HANDS OF BOTH THE ASSESSEES AND DIRECT THE AO TO DELETE THE PENALTY LEVIED U/S 271(1)( C) OF THE ACT IN THE HAND S OF BOTH THE ASSESSEES . I.T.A. NO. 5515 & 5516 / MUM/201 2 4 7 . IN THE RESULT, THE APPEAL S OF BOTH THE ASSESSEE S ARE ALLOWED. THE AB OVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31ST MARCH, 2015 . 31ST M ARCH, 2015 SD SD ( / AMIT SHUKLA ) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTAN T MEMBER MUMBAI: 31ST MARCH,2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI