The correct option is
A Lungs.
Lung alveoli are present in the lungs. They are branching from either alveolar sacs or alveolar ducts. Gaseous exchange of oxygen and carbon dioxide takes place in the alveoli. Oxygen which is inhaled from the air diffuses from the walls of the alveoli and enters the adjacent capillaries into the red blood cells. The oxygen is then carried by the blood to the body tissues. Similarly, carbon dioxide diffuses into the wall of the alveoli and is exhaled out.
Thus, the correct answer is option A.