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2012 (3) TMI 554 - ITAT AHMEDABADValidity of penalty imposed under section 271(1)(c) - Held that:- The assessee has a very close-relation with the donor as that of father and daughter and the natural love and affection could not be doubted by the Revenue in the case of the assessee. In this case, the assessee has filed an explanation which could not be said to be not bonafide. The material facts of the case were disclosed by the assessee at the time of assessment itself. Merely because the assessee could not prove the credit-worthiness of the donor by filing any documentary evidence, it could not be said that the assessee was guilty of concealment of income or filing of inaccurate particulars of income. The facts of the case may justify the addition made in the hands of the assessee, but are not sufficient to justify the imposition of penalty under Section 271(1)(c) of the Act. We are unable to sustain the reasoning of the CIT(A) that the levy of penalty was mandatory and no discretion, is left with the competent authority. In these facts of the case, we hold that it is not a fit case for levy of penalty under Section 271(1)(c) of the Act which is accordingly cancelled and the grounds of the appeal of the assessee are allowed.
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