Estimated purchase disallowance does not by itself justify penalty unless concealment or inaccurate particulars are independently proved.

Penalty under section 271(1)(c) could not be sustained where the addition was based on an estimated disallowance of alleged non-genuine purchases. The assessee had disclosed the purchases in the return, filed purchase details and made cheque payments, so concealment of income or furnishing of inaccurate particulars was not independently established. Acceptance of the quantum addition, including for buying peace, did not by itself justify penalty. On those facts, the deletion of penalty was proper and the Revenue's challenge failed.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 could be sustained where the addition was made on an estimated basis on account of alleged non-genuine purchases and the assessee had accepted the quantum addition without appeal.

Analysis: The addition arose from an estimated disallowance of a percentage of purchases treated as non-genuine. The assessee had disclosed the purchases in the return, furnished purchase details, and made payments through cheques. Mere acceptance of the quantum addition, stated to be for buying peace, did not by itself establish concealment of income or furnishing of inaccurate particulars. On these facts, the conditions for penalty under section 271(1)(c) were not satisfied.

Conclusion: The penalty was not leviable and the deletion of penalty was justified.

Final Conclusion: The Revenue's challenge failed, and the order deleting the penalty was sustained.

Ratio Decidendi: Penalty under section 271(1)(c) cannot be imposed merely because an estimated addition or disallowance is accepted; concealment or furnishing of inaccurate particulars must be independently established.

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