Concealment penalty cannot rest on suspicion alone where unexplained investment in a spouse's property is not proved deliberately concealed.

Penalty under section 271(1)(c) was held unsustainable where the assessment addition for unexplained investment in property could not, by itself, prove conscious concealment of income. The assessee failed to conclusively explain the source of investment, but the material remained insufficient to establish deliberate concealment for penalty purposes. Because the property stood in the wife's name and the assessment rested largely on suspicion and surrounding circumstances, the penalty was deleted and that deletion was upheld in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was justified on the basis of an addition sustained in assessment for unexplained investment in property standing in the name of the assessee's wife.

Analysis: The addition in assessment was sustained because the assessee could not conclusively establish the source of investment, but that by itself did not establish actual concealment of income. For penalty, it had to be shown that the assessee had consciously concealed income. Since the property stood in the wife's name and the assessment was made largely on suspicion and surrounding circumstances, the material was insufficient to prove concealment for penalty purposes.

Conclusion: The penalty was not sustainable and its deletion was upheld in favour of the assessee.

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