Penalty under section 270A fails where ledger extracts are uncorroborated and effective cross-examination is denied.

Penalty proceedings are independent of assessment proceedings, so the assessee could contest the penalty basis even without appealing the assessment orders. The levy under section 270A failed because the additions were based on ledger extracts and sworn statements that did not conclusively establish that the "SABARI" entry belonged to the assessee or that unaccounted purchases were made. Material discrepancies in the seized extracts and the denial of an effective opportunity to cross-examine further undermined the penalty case. Penalty cannot be sustained on loose sheets or uncorroborated material alone, and the penalty was deleted for all years in appeal.

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Issues: Whether penalty under section 270A was sustainable where the additions were based on JPACK ledger extracts and statements without corroborative evidence, and where effective cross-examination was denied.

Analysis: Penalty proceedings are independent of assessment proceedings, so the assessee could challenge the basis of the penalty even without appealing the assessment orders. The additions rested on ledger extracts and sworn statements, but the material did not conclusively establish that the ledger entry marked "SABARI" belonged to the assessee or that the assessee had made unaccounted purchases. The record also showed material discrepancies in the seized ledger extracts, and no effective opportunity of cross-examination was provided despite request. Penalty cannot be sustained merely on the basis of loose sheets or uncorroborated material.

Conclusion: The levy of penalty under section 270A was not sustainable and was deleted for all the assessment years in appeal.

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