2014 (6) TMI 527

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....in confirming the action of the Assessing Officer in levying penalty of Rs.3,60,110/- u/s 271(1)(c) of the Act." 2. Facts in brief as emerged from the corresponding penalty order passed u/s. 271(1)(c), dated 29.3.2010 and the assessment order passed u/s. 143(3), dated 30.12.2007 were that the assessee HUF is in the business of trading of yarn. It was noted by the AO that the assessee had received Rs.5,00,000/- as a gift each from Sri Vinodbhai Jayantilal Rathod and Balvantbhai Chhaganbhai Joshi. The assessee had furnished copies of the declaration of the gifts made by those donors. In respect of the declaration of Rs.5,00,000/- gifted by Sri Vinod Jayantilal Rathod, it was noted that amount was gifted out of his S.B. A/c No. 10054 with t....

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....made certain inquires and thereupon came to know that there was certain irregularities in the preparation of the drafts in favour of the assessee. The donors were not present but only their returns were furnished. He has, therefore, pleaded that in a situation when the correctness of the gift was not satisfactorily proved then the same was rightly disallowed as also the levy of penalty was justified. 3.1 From the side of the assessee, learned AR, Mr. Mehul Shah, appeared and placed reliance in the case of Jalaram Oil Mills, 253 ITR 192 (Guj) and National Textiles, 249 ITR 125 (Guj) for the legal proposition that no penalty can be levied when the addition is made u/s 68 of the IT Act. 4. Having heard the submissions of both the sides, ....