Penalty for estimated business receipts deleted where no material showed deliberate concealment or inaccurate particulars.

Penalty under section 271(1)(c) for alleged non-disclosure of business receipts was not sustainable where the assessee explained cash deposits as business turnover and offered income on a presumptive basis during assessment. The addition rested on estimation, and the Revenue produced no material showing deliberate concealment or furnishing of inaccurate particulars. Applying the principle that penalty does not automatically follow every quantum addition, the penalty was directed to be deleted in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable for non-disclosure of business receipts which were later offered to tax during assessment on an estimated basis under section 44AD.

Analysis: The assessee had not disclosed the business receipts in the return but explained the cash deposits as business turnover and offered income on presumptive basis during assessment. The addition ultimately rested on estimation, and there was no material brought by the Revenue to show a deliberate act of concealment or furnishing of inaccurate particulars. On the settled principle that penalty does not automatically follow every addition in quantum proceedings, and that concealment must be supported by some material indicating conscious default, the record did not justify penalty.

Conclusion: The penalty under section 271(1)(c) was not sustainable and was directed to be deleted, in favour of the assessee.

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