Ramesh P Gajani Huf, Mumbai vs Assessee

Mr.Ramesh P.Gajani, बनाम/ Income Tax Officer-24(3)(4), th E-809, Royal Samrat CHS Ltd, Vs. C-11, 4 floor, S V Road, Goregaon(W), Pratyakshakar Bhavan, Mumbai-400062 BBKC, Bandra (E), Mumbai-400051 (अपीलाथ /Appellant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AAEPG9990P

आयकर अपील सं./I.T.A. No.5516/Mum/2012 ( नधारण वष / Assessment Year :2004-05)

Mr.Ramesh P.Gajani,HUF, बनाम/ Income Tax Officer-24(3)(4), th E-809, Royal Samrat CHS Ltd, Vs. C-11, 4 floor, S V Road, Goregaon(W), Pratyakshakar Bhavan, Mumbai-400062 BBKC, Bandra (E), Mumbai-400051 (अपीलाथ /Appellant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AAFHR9402N

अपीलाथ ओर से / Assessees by Shri V.C Shah यथ क ओर से/Revenue by Shri Akhilendra P Yadav

सुनवाई क तार ख / Date of Hearing : 23.3.2015 घोषणा क तार ख /Date of Pronouncement : 31.3.2015

आदे श / 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 29.06.2012 passed by Ld CIT(A)-34, 2 I.T.A. No.5515 & 5516/Mum/2012

Mumbai and they relate to the assessment year 2004-05. Both the assessees 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. Both the parties had received gift of Rs.5 lakhs each during the year under consideration. Shri Ramesh P Gajani had received gift of from one Shri Hasmukh K Mehta of Surat and Shri Ramesh P Gajani, HUF had received gift from Shri Bhanjibhai Muljibhai Sheth of Surat. During the course of assessment proceedings, the AO called for various details in order to verify 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 gifts and accordingly assessed the same in the hands of both the assessees. It is pertinent to note that both the assessees 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 gifts by way of cheque. He submitted that the assessees, during the course of assessment proceedings, have filed copies of Indenture of gift, income tax returns furnished by the donors, copy of bank accounts. Further, the assessees could not compel the donors to appear before the 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 same as income of the assessees on account of difference of opinion only. Accordingly he 3 I.T.A. No.5515 & 5516/Mum/2012

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 explanations 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 there is a merit in the contention of the ld. AR. As pointed out by the ld. AR, the AO has not proved the gifts to be bogus ones. The assessees have filed all the available details 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 assessees could not produce donors and could not furnish 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 assessees 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, the 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 hands of both the assessees.

4 I.T.A. No.5515 & 5516/Mum/2012 7. In the result, the appeals of both the assessees are allowed.

The above order was pronounced in the open court on 31st March, 2015.

घोषणा खल ु े यायालय म दनांकः 31st March, 2015 को क गई ।

Sd sd (अ मत शु ला / AMIT SHUKLA) (बी.आर.बा करन / B.R. BASKARAN) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER

मुंबई Mumbai:31st March,2015.

व. न.स./ SRL , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)- concerned

4. आयकर आयु त / CIT concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मुंबई / DR, ITAT, Mumbai concerned

6. गाड फाईल / Guard file.

आदे शानुसार/ BY ORDER, True copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai