VIMLA DEVI AGARWAL, Jaipur V. ACIT, Jaipur

ITA 855/JPR/2013

• Counselvise Citation: 85523114 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 14-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Search and seizure; Revised return
• Section: 153A; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 855/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2002-03 SMT. VIMLA DEVI AGARWAL 155, GOVIND NAGAR AMER ROAD, JAIPUR CUKE VS. THE ACIT CIRCLE- 1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABYPA 7717 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 856/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2002-03 SHRI KRISHAN KUMAR AGARWAL 154-155, GOVIND NAGAR AMER ROAD, JAIPUR CUKE VS. THE ACIT CIRCLE- 1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABYPA 7717 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L.PODDAR, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/12/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 18/12/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM BOTH THESE APPEALS HAVE BEEN FILED BY DIFFERENT ASS ESSEES AGAINST TWO SEPARATE ORDERS OF THE LD. CIT(A), ALWAR DATED 18-10-2013 FOR THE ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 2 ASSESSMENT YEAR 2002-03 RAISING THEREIN COMMON GROU NDS IN BOTH THE APPEALS AS UNDER:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER PASSED BY LD. CIT(A) U/S 271(1)( C) OF TH E I.T. ACT, 1961 IS BAD IN LAW AND VOID AB-INITIO 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 1,90,965/- @ 125% ON TAX SOUGHT TO BE EVADED U/ S 271(1)(C ) OF THE I.T. ACT, 1961 2.1 BRIEF FACTS OF THE CASE ARE THAT THESE ARE TWO APPEALS BY THESE ASSESSEES WHO ARE HUSBAND AND WIFE. THEY FILED TH EIR RESPECTIVE REGULAR RETURNS OF INCOME. SEARCH AND SEIZURE OPERATION UN DER SECTION 132(1) OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT ON 23.11.2 005 AT THEIR RESIDENTIAL PREMISES. IN RESPONSE TO NOTICE U/S 153 C RETURN DECLARING THE SAME INCOME WAS FILED AS IN THE ORIGINAL RETURN WAS FILED. DURING THE COURSE OF SEARCH DOCUMENTS OF GIFT OF RS. 5 LACS TO EACH OF THEM BY ONE SHRI SUNIL KUMAR MITTAL AN NRI WERE FOUND. THEY WER E PART OF THE ORIGINAL RETURN, HOWEVER THESE AMOUNTS WERE OFFERED IN THE HANDS OF BOTH OF THEM. HOWEVER THEY WERE CONTESTED IN APPEALS BUT THE ADDITIONS WERE RETAINED. SUBSEQUENTLY PENALTY PROCEEDINGS U/S 271( 1)(C) WERE INITIATED QUA THESE GIFTS BY LD. AO. THE ASSESSEES FILED THE IR REPLIES CONTENDING THAT ALL THESE DOCUMENTS REPRESENTED VALID GIFTS AN D ARE PART OF REGULAR ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 3 AFFAIRS DISCLOSED IN THE ORIGINAL RETURNS AND DO NO T CONSTITUTE INCRIMINATING DOCUMENTS. MERELY BECAUSE THEY ARE FINALLY ADDED AS INCOME, PENALTY CANNOT BE LEVIED AUTOMATICALLY WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES. THE OFFER OF SURRENDER WAS CONDITION AL SUBJECT TO STIPULATION THAT NO PENALTY WILL BE LEVIED IN THIS BEHALF. LD. ASSESSING OFFICER HOWEVER LEVIED THE IMPUGNED PENALTY U/S271( 1)(C). 2.2 AGGRIEVED THE ASSESSES PREFERRED APPEALS BEFORE LEARNED CIT(A) WHO MERELY RELIED ON THE ITAT FINDINGS IN THE QUANT UM APPEALS AND CONFIRMED THE IMPOSITION OF PENALTIES. 2.3 AGGRIEVED, ASSESSEES ARE IN SECOND APPEALS. 2.4 LD. COUNSEL CONTENDS THAT- (I) THE GIFTS WERE DULY RECEIVED BY THE ASSESSEE S BY BANKING CHANNELS FROM NRI ACCOUNT OF SHRI SUNIL KUM AR MITTAL (DONOR) WHO IS A CLOSE FAMILY FRIEND AND DISTANT RE LATIVE ALSO. IT WAS RECEIVED BY CHEQUES DATED 01.12.2001 WHICH IS DULY REFLECTED IN THE BANK ACCOUNTS OF THE ASSESSEES AND DONOR. GIFTS IN QUESTION ARE SUPPORTED BY CONFIRMATIONS AND AFFIDAVIT. THE IDENT ITY, GENUINENESS OF GIFT AND FINANCIAL CAPACITY OF NRI MR. SUNIL MIT TAL ARE NOT IN QUESTION IN LEGAL TERMS. ONLY DUE TO SCARE AND PRES SURE OF SEARCH PARTY AND IN A STATE OF PANIC, ASSESSEES SURRENDERE D THE GIFTS WITH A CONDITION THAT NO PENALTY PROCEEDING WILL BE INITIA TED. IT WAS INTIMATED TO SEARCH PARTY THAT THE GIFTS WERE GENUI NE AND THE SURRENDER WAS BEING MADE TO GET RID OF THE PRESSURE OF SEARCH PROCEEDINGS AND TO AVOID PROTRACTED LEGAL PROCEEDIN GS. ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 4 (II) DURING THE ASSESSMENT PROCEEDINGS NO ENQUIRIES WERE MADE AND ADDITION WAS SIMPLY MADE WITHOUT BRINGING ANY MATERIAL ON RECORD MERELY RELYING ON THE STATEMENT WHICH WAS RETRACTED BY NOT OFFERING THE INCOME IN THE RETURNS U/S 153A. (III) PENALTY PROCEEDINGS ARE DISTINCT AND SEPARAT E AND A PLEA WHICH WAS NOT RAISED IN QUANTUM PROCEEDINGS CA N BE RAISED IN PENALTY PROCEEDINGS. IT HAS BEEN HELD BY VARIOUS CO URTS INCLUDING HONBLE RAJASTHAN HIGH COURT IN JAI STEEL VS. ACIT , 259 CTR 281 (RAJ.) AND DELHI HIGH COURT IN CIT VS. KABUL CHAWLA (ITA NO. 707/2014) THAT ADDITIONS CANNOT BE MADE IN SEARCH P ROCEEDINGS IF NO INCRIMINATING MATERIAL IS FOUND QUA ANY THAT ITE M. IN ASSESSEES CASE ALL THE REGULAR AFFAIRS INCLUDING THE GIFTS WE RE DULY DISCLOSED IN REGULAR RETURNS, CONSEQUENTLY LEGALLY SPEAKING THES E ADDITIONS COULD NOT HAVE BEEN MADE IN QUANTUM PROCEEDINGS. THIS LEG AL PLEA CAN BE DULY RAISED BY ASSESSEES IN THESE PENALTY APPEALS. SINCE THE ADDITIONS WERE NOT LEGALLY MAINTAINABLE AND WRONGLY ADDED ONLY ON THE BASIS OF A CONDITIONAL ADMISSION IGNORING THE F ACT THAT NO INCRIMINATING MATERIAL WAS FOUND; THE IMPUGNED PENA LTIES BEING BASED ON SUCH SHAKY ADDITIONS IS NOT TENABLE. (IV) WHILE DECIDING THE ISSUE OF PENALTY U/S 271(1) (C) IT IS INCUMBENT ON AUTHORITIES TO EXAMINE ASSESSES EXPLA NATION TO ASCERTAIN WHETHER THE PENALTY IS IMPOSABLE OR NOT O N THE MERITS OF REPLY. DESPITE ASSESSEES EXPLANATIONS, DURING THE P ENALTY PROCEEDINGS NO ENQUIRY WHATSOEVER WAS MADE TO ASCER TAIN THE FACTS OR TO REBUT THE CONTENTIONS RAISED BY ASSESSEES. P ENALTY WAS LEVIED AUTOMATICALLY MERELY RELYING ON QUANTUM ADDITIONS A ND WITHOUT MENTIONING ANY REASON OR CONDUCTING ANY ENQUIRY REG ARDING GENUINENESS OF THE GIFT. THUS THE ASSESSEES EXPLAN ATION REMAIN UNREBUTTED, IN THESE CIRCUMSTANCES, IMPOSITION OF P ENALTY IS UNJUSTIFIED. ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 5 THE ASSESSING OFFICER HAS NOT CONTROVERTED THE VALI D DOCUMENTS REPRESENTING THE GIFT THROUGH PROPER BANKING CHANNE LS EITHER BY ANY INQUIRY OR SUMMONING THE DONOR. IT IS NOT DISPUTED THAT ALL THE RELEVANT DETAILS WERE PROVIDED BY ASSESSEE AND ARE PART OF T HE RECORD. TO AVOID LITIGATION ASSESSES AGREED FOR ADDITIONS, WHICH WER E ALSO CHANGED IN APPEALS. PENALTY HAS BEEN AUTOMATICALLY LEVIED. IMP UGNED PENALTIES HAVE BEEN LEVIED SOLELY ON THE BASIS OF THE RETRACTED CO NDITIONAL ADMISSION AND AD HOC FINDING IN ASSESSMENT. ASSESSEES HAVE DISCH ARGED ITS BURDEN BY FILING ALL RELEVANT DOCUMENTS, VIZ: THE DEED OF GIF T, THE BANK STATEMENT OF THE ASSESSEE REFLECTING THE RECEIPT ETC. SO THERE W AS NO INCOME CONCEALED AND/OR INACCURATE PARTICULARS FURNISHED BY THE APPE LLANT. UNDER THE SAME FACTS AND CIRCUMSTANCES IN THE CASE OF VISHAL DEMBL A VS. DEPUTY COMMISSIONER OF INCOME TAX REPORTED IN (2013) 93 DT R 1 JODHPUR ITAT HELD THAT:- ' IN THE ABSENCE OF RECOVERY OF ANY DOCUMENT OR INCRI MINATING EVIDENCE IN THE COURSE OF SEARCH, GIFTS ALREADY DIS CLOSED BY THE ASSESSEE IN THE RETURNS FILED PRIOR TO THE SEARCH W HICH HAVE ATTAINED FINALITY, CANNOT BE DISTURBED IN THE ASSESSMENT U/S 153A' . THEREFORE CONSIDERING THE ABOVE PREPOSITION NO PENA LTY CAN BE LEVIED ON SUCH TYPE OF ADDITIONS. RELIANCE IS ALSO PLACED ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS M G EORGE AND BROTHERS [160 ITR 511], WHEREIN IT WAS HELD AS UNDER ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 6 WHERE THE ASSESSEE FOR ONE REASON OR THE OTHER AGR EES OR SURRENDERS CERTAIN AMOUNTS FOR ASSESSMENT, THE IMPO SITION OF PENALTY SOLELY ON THE BASIS OF THE ASSESSEE'S SURRE NDER WILL NOT BE WELL FOUNDED. DEPENDING UPON THE FACTS AND CIRCUMST ANCES OF EACH CASE THE COURT HAS TO DECIDE WHETHER PENALTY IS JUS TIFIED. IT IS ALWAYS FOR THE REVENUE TO BRING THE CASE UNDER THE AMBIT OF S. 271(1)(C) BY ESTABLISHING THAT THERE IS CONCEALMENT ON THE PART OF THE ASSESSEE. THE EXPLANATION TO S. 271(1)(C) INSER TED W.E.F. 1ST APRIL, 1964 MERELY RAISES A REBUTTABLE PRESUMPTION BUT THE BASIC PRINCIPLE THAT THERE SHOULD HAVE BEEN CONCEALMENT S TILL REMAINS. THE DOUBT CREATED BY THE EXPLANATION CAN BE DISPLAC ED IF THERE IS MATERIAL TO SHOW THAT THE FAILURE TO RETURN THE COR RECT INCOME DID NOT ARISE FROM ANY FRAUD OR GROSS OR WILFUL NEGLECT ON THE PART OF THE ASSESSEE. CIT VS. MOHAN DAS HASSA NAND (1983) 34 CTR (DEL) 361 : (1983) 141 ITR 203 (DEL) : TC50R.119 RELIED ON . FURTHER RELIANCE IS ALSO PLACED ON THE FOLLOWING CA SE LAWS WHICH SUPPORTS THE CASE OF THE APPELLANT. A. SIR SHADILAL SUGAR MILLS (168 ITR 7051 (SC)) IT HAS BEEN HELD THAT THERE MAY BE A HUNDRED AND ONE REASONS FO R NO PROTESTING AND AGREEING TO AN ADDITION BUT THAT DOE S NOT FOLLOW TO THE CONCLUSION THAT THE AMOUNT AGREED TO BE ADDED WAS CONCEALED INCOME B. CIT V. MANJUNATHA COTTON & GINNING FACTORY (2013 35 TAXMANN 250 (KAR)] , THE HONBLE KARNATAKA HIGH COURT HAS CATEGORICALLY HELD THAT THE IMPOSITION OF PENALTY IS NOT AUTOMATIC, I.E., IMPOSITION OF PENALTY EVEN IF THE TAX LIABILITY IS ADMITTED, I S NOT AUTOMATIC. EVEN IF THE ASSESSEE HAS NOT CHALLENGED THE ORDER OF ASSESSMENT LEVYING TAX AND INTEREST AND HAS PAID THE SAME, THAT BY ITSELF WOULD NOT BE SUFFICIENT FOR THE AUTH ORITIES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY, UNLESS IT IS DISCERNIBLE FROM THE ASSESSMENT ORDER THAT, IT IS O N ACCOUNT ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 7 OF SUCH UNEARTHING OR ENQUIRY CONCLUDED BY AUTHORIT IES WHICH HAS RESULTED IN PAYMENT OF SUCH TAX OR SUCH T AX LIABILITY CAME TO BE ADMITTED, AND IF NOT, IT WOULD HAVE ESCAPED FROM TAX NET AS OPINED BY THE ASSESSING OFF ICER IN THE ASSESSMENT ORDER.] THE VERY FACT THAT THE ASSESSEE AGREED TO PAY TAX A ND DID NOT CHALLENGE THE ASSESSMENT ORDER, CANNOT BE CONSTRUED AS MALA FIDE. THEREFORE, THE TRIBUNAL WAS JUSTIFIED IN SETT ING ASIDE THE ORDERS PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY. [PARA 64] C. CIT VS RELIANCE PETROPRODUCTS [322 ITR 158 (SC)], THE HONBLE APEX COURT HAS CATEGORICALLY HELD THAT, MER ELY BECAUSE THE CLAIM OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER S. 271(1)(C). IF WE ACCEP T THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RET URN WHERE THE CLAIM MADE IS NOT ACCEPTED BY AO FOR ANY REASON , THE ASSESSEE WILL INVITE PENALTY UNDER S. 271(1)(C). TH AT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. THE HONBLE APEX COURT HAS ALSO CATEGORICALLY EXPLA INED THE SITUATION WHEREIN, THE RATIO OF DECISION IN THE CAS E OF DILIP N. SHROFF VS. JT. CIT & ANR. (2007) 210 CTR (SC) 228 : (2007) 6 SCC 329, WOULD STILL HOLD GOOD AND IS NOT OVERRID DEN BY THE DECISION IN THE CASE OF UNION OF INDIA VS. DHAR AMENDRA TEXTILE PROCESSORS (2007) 212 CTR (SC) 432 : (2008) 13 SCC 369, AS ALSO, THE DECISION IN UNION OF INDIA VS . RAJASTHAN SPINNING & WEAVING MILLS (2009) 224 CTR ( SC) 1 : (2009) 23 DTR (SC) 158 : (2009) 13 SCC 448 THE COURT WENT ON TO HOLD THAT THE OBJECTIVE BEHIND ENACTMENT OF S. 271(1)(C) R/W EXPLANATIONS INDICATE D WITH THE SAID SECTION WAS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AND, THERE FORE, WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTR ACTING CIVIL LIABILITY AS WAS THE CASE IN THE MATTER OF PROSECUT ION UNDER S. 276C OF THE ACT. THE BASIC REASON WHY DECISION IN D ILIP N. SHROFF VS. JT. CIT & ANR. (CITED SUPRA) WAS OVERRUL ED BY THIS ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 8 COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PRO CESSORS (CITED SUPRA), WAS THAT ACCORDING TO THIS COURT THE EFFECT AND DIFFERENCE BETWEEN S. 271(1)(C) AND S. 276C OF THE ACT WAS LOST SIGHT OF IN CASE OF DILIP N. SHROFF VS. JT. CI T & ANR. (CITED SUPRA). HOWEVER, IT MUST BE POINTED OUT THAT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), NO FAULT WAS FOUND WITH THE REASONING IN THE DECISI ON IN DILIP N. SHROFF VS. JT. CIT & ANR. (CITED SUPRA), WHERE T HE COURT EXPLAINED THE MEANING OF THE TERMS 'CONCEAL' AND 'INACCURATE'. IT WAS ONLY THE ULTIMATE INFERENCE IN DILIP N. SHROFF VS. JT. CIT & ANR. (CITED SUPRA) TO THE EFFE CT THAT MENS REA WAS AN ESSENTIAL INGREDIENT FOR THE PENALTY UND ER S. 271(1)(C) THAT THE DECISION IN DILIP N. SHROFF VS. JT. CIT & ANR. (CITED SUPRA) WAS OVERRULED. D. CIT VS SURESH CHANDRA MITTAL [251 ITR 9 [SC] ] , WHEREIN IT HAS BEEN HELD THAT, IT IS WELL SETTLED THAT UNDER S. 271(1)(C), INITIAL BURDEN LIES ON THE REVENUE TO ESTABLISH THA T ASSESSEE HAD CONCEALED THE INCOME OR HAD FURNISHED INACCURAT E PARTICULARS OF SUCH INCOME. THE BURDEN SHIFTS TO TH E ASSESSEE ONLY IF HE FAILS TO OFFER ANY EXPLANATION FOR THE U NDISCLOSED INCOME OR OFFERS EXPLANATION WHICH IS FOUND TO BE F ALSE BY THE ASSESSING AUTHORITY. E. JAI SHREE SOMANI VS. ACIT [47 TW 219(ITAT JAIPUR) D T. 12.04.2012 HELD THAT, ALTHOUGH ADDITIONS ON ACCOUNT OF CASH CREDITS WAS SUSTAINED BY ITAT, IT WAS NOT NECESSARY THAT PENALTY IS TO BE IMPOSED F. A RAJENDRA VS. ACIT [127 ITD 361 (CHENNAI) 2010]: IN THIS CASE IT WAS FOUND THAT GIFT RECEIVED FROM NRI, WAS DISBELIEVED AND THE EXPLANATION OF THE ASSESSEE WAS REJECTED. BUT IT WAS HELD THAT RULES OF PREPONDERANCE CAN BE APPLIED FOE MAKING ADDITION TO INCOME, BUT NOT FOR IMPOSING PENALTY. THUS PENALTY WAS QUASHED. THE RATIO OF THIS CASE SQ UARELY APPLIES TO THE APPELLANT. G. DINESH B THAKKAR VS. ACIT [49 SOT 147 ]:- IN THIS CASE AMOUNT RECEIVED ON GIFT WAS NOT ACCEPTED. HELD THAT , ADDITION WAS ON ACCOUNT OF REJECTION OF EXPLANATION , AND HENCE PENALTY WAS NOT LEVIABLE U/S 271(1)(C) ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 9 ADVERTING TO CASE LAW PREM PAL GANDHI VS CIT [335 I TR 23 P&H CITED BY THE LEARNED. CIT(A), IT DOES NOT APPLY TO THE AP PELLANTS AS IN THAT CASE, AN AMOUNT WAS SURRENDERED IN THE REVISED RETU RN AFTER NOTICE U/S 148 WAS ISSUED, FOR THE SPECIFIC REASON OF THE SAID AMOUNT THAT WAS SUBSEQUENTLY DECLARED IN THE REVISED RETURN OF INCO ME W HEREAS IN THE CASE OF THE APPELLANT, COMPLETE DETAILS AS REGARDS THE G IFT WERE FILED BY THE APPELLANT, AND ONLY TO BUY PEACE FROM THE DEPARTMEN T, THE SAID AMOUNT WAS OFFERED TO BE TAXED. THE SAID RECEIPT OF GIFT W AS NOT THE REASON OF SEARCH OPERATION. IT IS VEHEMENTLY CONTENDED THAT U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND APPLYING THE JUDICIAL PRECEDENTS CITED ABOVE, THE IMPUGNED PENALTIES LEVIED U/S 271(1)(C) DESERVE TO BE DELETED IN THESE CASES. 2.5 LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIE S. 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN MY CONSIDERED OPINION IN TH E GIVEN FACTS AND CIRCUMSTANCES THE IMPUGNED PENALTIES ARE NOT FIT TO BE LEVIED IN THESE CASES FOR FOLLOWING REASONS:- I. THE TRANSACTIONS OF GIFTS IN QUESTION WERE DULY REFLECTED IN THE DISCLOSED BANK A/CS OF THE DONEES AND DONOR AND FURTHER IN REGULAR RETURNS OF INCOME FILED BY THE A SSESSEE. ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 10 CONSEQUENTLY IT CANNOT BE HELD THAT THE GIFT DOCUME NTS CONSTITUTED ANY INCRIMINATING DOCUMENTS. II. THE IDENTITY AND FINANCIAL CAPACITY OF THE DON OR HAS NOT BEEN ADVERSELY ESTABLISHED BY THE AUTHORITIES B ELOW, TRANSACTIONS BEING THROUGH BANKING CHANNELS THEIR G ENUINENESS IS NOT IN DOUBT. III. ASSESSEES FILED DETAILED EXPLANATION WHICH REM AIN UNCONTROVERTED THUS THE BASIS OF PENALTY REMAINS UN SUBSTANTIATED DUE TO IGNORING THE EXPLANATION. IT IS TRITE LAW TH AT PENALTY CANNOT BE HELD AS TENABLE WHEN THE ASSESSEES EXPLANATION REMAIN UNREBUTTED. IV. THE BASIS OF PENALTY IS ADMISSION DURING THE CO URSE OF SEARCH WHICH WAS RETRACTED IN RETURNS OF INCOME FIL ED BY THE ASSESSEES FOR WHICH THEY GAVE AN EXPLANATION. IT IS ALSO WELL SETTLED THAT MERE QUANTUM ADDITIONS IN ASSESSMENT CANNOT LE AD TO PENALTY AUTOMATICALLY. CONSIDERATION OF ASSESSEES REPLY AN D CONDUCTING OF DESIRABLE ENQUIRIES THEREON ARE ESSENTIAL REQUIREME NTS FOR A VALID LEVY OF PENALTY. V. SINCE THE INCRIMINATING EVIDENCE WAS NOT FOUND IN SEARCH ACTION QUA THESE GIFTS, THE ADDITIONS IN THE SE CIRCUMSTANCES BECOME QUESTIONABLE IN 153A ASSESSMENTS. THE LEGAL PLEA BY ASSESSEES IN THIS BEHALF WHICH CAN BE RAISED IN PE NALTY PROCEEDINGS WHICH ARE DISTINCT AND SEPARATE, CARRIES MERIT AND HAS DIRECT BEARING ON THE IMPUGNED LEVY OF PENALTY. ITA NO. 855/JP/2013 SMT. VIMLA DEVI AGARWAL VS. ACIT CIRCLE- 1, JAIPUR . 11 VI. THE ABOVE MENTIONED JUDICIAL PRECEDENTS CITED BY THE ASSESSEES SUPPORT THEIR CONTENTIONS AND PROPOSITION S THAT THEIR CASES ARE NOT FIT FOR IMPOSITION OF PENALTY U/S 271(1)(C) . IN VIEW OF THESE FACTS AND CIRCUMSTANCES, I HOLD TH AT THESE ARE NOT FIT CASES FOR IMPOSITION OF PENALTY U/S 271(1)(C), WHICH ARE DELETED. 3.0 IN THE RESULT BOTH THE APPEALS FILED BY THE ASS ESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 /12/201 5 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18/12/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. VIMLA DEVI AGARWAL AND SHRI KRISHAN KUMAR AGARWAL 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT CIRCLE- 1, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 855 & 856/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR