Penalty for estimated purchase disallowance fails absent evidence of concealment or inaccurate particulars.

Penalty under section 271(1)(c) is not sustainable where a purchase claim is only partly accepted and the quantum addition rests on estimation rather than clinching evidence of concealment. The assessee had produced purchase bills, ledger accounts and bank statements, and the material on record did not show furnishing of inaccurate particulars or suppression of income. On that basis, the penalty was held unjustified and deleted.

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Issues: Whether penalty under section 271(1)(c) was sustainable where the purchase claim was not fully accepted and the addition was sustained only on estimation.

Analysis: The purchase claim was not established to the full satisfaction of the Assessing Officer, but the record showed that the assessee had produced purchase bills, ledger accounts, and bank statements. The addition ultimately sustained in quantum was based on estimation and not on clinching evidence disproving the purchases. Penalty under section 271(1)(c) cannot rest only on an unproved claim when the surrounding material does not establish concealment of income or furnishing of inaccurate particulars.

Conclusion: The penalty was not justified and was deleted.

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