Concealment penalty fails when quantum addition is only estimated and no clear evidence of suppressed sales exists.

Penalty for concealment could not be sustained where the quantum addition survived only on an estimated basis and the record did not prove suppression of sales. The Tribunal found that the gross profit returned by the assessee was accepted in substance, the remaining difference was small, and the statement relied on by the revenue did not amount to an admission of concealment. On the facts of a retail business with multiple items and year-end stock verification, an omission by oversight could not be excluded, so penalty under section 271(1)(C) was cancelled.

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Issues: Whether penalty under section 271(1)(C) of the Income-tax Act, 1961 was sustainable when the addition survived only on an estimated basis and concealment of income was not established.

Analysis: The addition sustained in quantum proceedings was limited after the Tribunal accepted the gross profit as returned and the surviving difference was small. The material on record did not establish suppression of sales, and the statement relied on by the revenue did not contain an admission of concealment. In a retail business with numerous items and year-end stock verification, an omission by oversight could not be ruled out on the facts found.

Conclusion: Penalty under section 271(1)(C) was not justified and was cancelled; the assessee succeeded.

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