False loan entries and inaccurate particulars justified penalty where the assessee's own conduct showed concealment.

Penalty under section 28(1)(c) was justified where the assessee knowingly entered cash credits in the names of petty employees and later sought to support those entries with false loan documents. The High Court distinguished cases where penalty depended only on rejection of an explanation, holding that the assessee's own books, conduct, and unproved explanation furnished sufficient material to show concealment and deliberate furnishing of inaccurate particulars. The penalty was therefore upheld against the assessee.

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Issues: Whether the imposition of penalty under section 28(1)(c) of the Indian Income-tax Act, 1922, was lawful or justified on the facts and in the circumstances of the case.

Analysis: The assessee's cash credits were entered in the names of petty employees, and the explanation that they were in truth loans from another concern was accepted only after detection by the Income-tax Officer. The Tribunal found that the assessee had knowingly furnished inaccurate particulars by making false and fictitious entries in its books and by seeking to support them with documents showing loans from the named employees. The court distinguished cases where penalty rested only on the rejection of an explanation and held that, here, the assessee's own version and conduct supplied the necessary material to establish concealment and furnishing of inaccurate particulars.

Conclusion: The question was answered in the affirmative and against the assessee. The penalty under section 28(1)(c) was upheld as justified.

Ratio Decidendi: Where an assessee knowingly records false loan entries in its books and later attempts to support them with an unproved explanation, the material on record may be sufficient to establish concealment and deliberate furnishing of inaccurate particulars for penalty under section 28(1)(c) of the Indian Income-tax Act, 1922.

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