Penalty on estimated bank-deposit additions requires proof of concealment; mere quantum estimation is not enough.

Penalty under section 271(1)(c) cannot be sustained where taxable income is determined only by estimation on bank deposits and the penalty record contains no independent finding of fraud, gross negligence, deliberate concealment, or furnishing of inaccurate particulars. A mere sustained quantum addition does not by itself prove concealment when the assessment rests on an estimated rate. On that basis, the penalty was deleted in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) could be sustained where the income was determined only by estimation on the basis of deposits in the assessee's bank account.

Analysis: The addition leading to penalty was made by applying a flat estimated rate to the bank deposits, and the penalty was imposed without any independent finding in the penalty proceedings of fraud, gross negligence, or deliberate concealment. The material on record showed only an estimated assessment of income, and the mere fact that the quantum addition was sustained did not by itself establish concealment of income or furnishing of inaccurate particulars. In such cases, where the taxable income is determined on estimate and the element of actual concealment is not proved, penalty under section 271(1)(c) is not justified.

Conclusion: Penalty under section 271(1)(c) was not leviable on the estimated addition and was deleted in favour of the assessee.

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