Concealment penalty upheld where books and fixed deposits supported an inference of deliberate suppression of income.

Penalty for concealment of income was upheld where the assessee's explanation for cash credits and bank deposits was found unacceptable on the facts. The account books appeared to have been arranged to suggest that cash credits were properly ledgerised, while substantial fixed deposits in family members' names were omitted from the books and were used as collateral for bank overdrafts. On that material, the income-tax authorities were justified in inferring deliberate concealment rather than a mere failure to substantiate the explanation, and the penalty under section 28(1)(c) was validly imposed.

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Issues: Whether, on the facts and circumstances of the case, penalty was lawfully imposed under section 28(1)(c) of the Income-tax Act for concealment of income.

Analysis: The assessee's explanation for the cash credits and bank deposits was found unacceptable on the facts. The account books showed entries designed to create an impression that cash credits had been ledgerised, while substantial fixed deposits stood in the names of family members and were not reflected in the books. Those deposits were also used as collateral for bank overdrafts, supporting the inference that the amounts really belonged to the assessee. The material before the income-tax authorities therefore justified a finding of deliberate concealment rather than a mere failure to prove the explanation.

Conclusion: Penalty under section 28(1)(c) of the Income-tax Act was validly imposed, and the answer to the referred question was against the assessee.

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