TMI Blog2014 (6) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... Amrutlal Doriwala (HUF) Prop. of M/s. Nirav Rayon’s Versus Income Tax Officer [2014 (6) TMI 527 - ITAT AHMEDABAD] - the declaration of gift was filed by the assessee. Copies of those declarations are furnished before us in a compilation. Penalty has been levied by invoking the deeming provisions under Section 68 of the IT Act - deeming provisions cannot be extended to hold that the assessee has concealed the income especially when the assessee has placed on record certain evidences such as gift declarations and bank accounts to show that the gift was received under bona fide belief that the same was a genuine gift - it was taxed during assessment proceedings but the penalty u/s 271(1)(c) cannot be levied automatically - no material coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te on which cash were deposited in her bank account could not be verified. In respect of Mr. Hasitkumar Shah, the Assessing Officer observed that his identity could not be established and in absence of details about his business or profession in the gift declaration as well as in absence of declaration about the annual income in the gift deed, it is difficult to recognize the claim. 4. In respect of seven donors from whom the assessee claimed to have received aggregate gift of Rs 13,00,000/- there is absolutely no discussion in the penalty order. On the above reasoning, the Assessing Officer levied penalty in respect of addition of Rs 27,00,000/- u/s. 68 which addition was also confirmed by the Commissioner of Income Tax (Appeals). 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition was made under a deeming provision of section 68 of the Act and therefore, levy of penalty u/s. 271(1)(c) in respect of these additions made u/s. 68 was not justified. She also relied upon the decision of this Bench of the Tribunal in the case of Vasantlal Amrutlal Doriwala (HUF) Vs. ITO Ward-5(2), Surat for Assessment Year 2005-06 passed in ITA No. 19/Ahd/2013 vide order dated 23.08.2013. 8. On the other hand, the Departmental Representative supported the orders of the lower authorities. 9. We find that there is absolutely no discussion in the penalty order in respect of gift of Rs 13,00,000/- received from following seven persons Sr.No. Name of the Donor Amount of Gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has not offered any explanation. Facts of the case have revealed that the declaration of gift was filed by the assessee. Copies of those declarations are furnished before us in a compilation. Further, the assessee has placed on record the copy of the bank account wherein the gifted amount was credited. The assessee has also furnished the photocopies of the return filed by those donors. With this factual background, we have carefully perused the decision of National Textiles (Guj) (supra), wherein the Court has observed that in order to justify the levy of penalty, two factors must co-exist, (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee's income. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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