Penalty for disallowed valuation-loss claim cannot apply where the claim on share conversion was not mala fide.

Penalty for concealment or furnishing inaccurate particulars does not arise merely because an assessment disallows a claim or makes an addition. Where the claim for valuation loss on conversion of shares from investment to stock-in-trade is not mala fide, the basis for penal consequences is absent. Penalty was therefore not leviable.

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Issues: Whether penalty for concealment or furnishing inaccurate particulars could be sustained where the assessee's disallowed claim was not mala fide.

Analysis: A disallowance or addition in assessment does not, by itself, attract penalty. The finding that the claim concerning valuation loss on conversion of shares from investment to stock-in-trade was not mala fide excluded the basis for penal consequences.

Conclusion: Penalty was not leviable; the issue was decided in favour of the assessee.

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