Penalty for disallowed deduction claim cannot stand without concealment or inaccurate particulars under income-tax law.

A mere disallowance of a deduction claim under section 36(1)(vii) did not, by itself, justify penalty under section 271(1)(c) of the Income-tax Act, 1961. The record did not show concealment of income or furnishing of inaccurate particulars, and the appellate authorities' concurrent view was that penalty could not be sustained simply because the claim was found untenable. On that basis, penalty was held not exigible, and no substantial question of law arose.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the assessee's claim for deduction under section 36(1)(vii) was disallowed, and whether any substantial question of law arose.

Analysis: The disallowance of a claim by itself did not establish concealment of income or furnishing of inaccurate particulars. The materials on record did not show that the assessee had hidden income or supplied wrong particulars. The concurrent view of the appellate authorities was that the penalty could not be sustained merely because the claim was found unacceptable.

Conclusion: Penalty under section 271(1)(c) was not exigible, and no substantial question of law arose.

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