2012 (5) TMI 617 - AT - Income Tax

Appeal Granted: Penalty Cancelled on Gifts, Tribunal Cites Age & Documents

The Tribunal allowed the appeal, canceling the levy of penalty on the gifts received. The Tribunal found the penalty unjustified due to the age and demise ... - Issues involved: Appeal against levy of penalty u/s 271(1)(c) on gifts received, genuineness of gifts, confirmation of gifts, addition of unexplained expenditure, justification of penalty, non-substantiation of gifts.Summary:Issue 1: Confirmation of levy of penalty on gifts receivedThe Assessing Officer added gifts received as income due to lack of proof of genuineness. Tribunal confirmed addition of gift from one donor but remanded another gift for re-examination. Penalty proceedings were initiated u/s 271(1)(c) for total gifts received, including an addition for unexplained expenditure. Penalty was levied on the total amount, leading to an appeal.Issue 2: CIT(A)'s decision on penalty levyCIT(A) sustained the penalty on the gift confirmed by the Tribunal, directing recalculation of penalty amount. Despite submissions and proofs provided by the assessee, CIT(A) found the explanation unsatisfactory and upheld the penalty.Issue 3: Tribunal's decision on penalty levyAssessee appealed before the Tribunal, reiterating submissions made before CIT(A) and providing additional evidence. Assessee argued that penalty cannot be levied as it was a case of non-substantiation, not inaccurate particulars. Various case laws were cited to support the argument.Issue 4: Tribunal's decision on penalty levyAfter considering submissions and evidence, the Tribunal found the levy of penalty unjustified. The Tribunal noted the age and demise of the assessee and donor, along with the provided documents. Despite the lack of conclusive proof of gift genuineness, the Tribunal concluded that penalty was not warranted. Citing relevant case laws, the Tribunal canceled the levy of penalty.In conclusion, the Tribunal allowed the appeal, canceling the levy of penalty on the gifts received.