Penalty for estimated profit additions deleted where concealment and inaccurate particulars were not established.

Penalty under section 271(1)(c) was held unsustainable where the assessment addition was based only on estimated gross profit from alleged non-genuine purchases. The Revenue had not fully established concealment of income or furnishing of inaccurate particulars, and mere estimation of profit was insufficient to justify penal action. The penalty was therefore directed to be deleted for each assessment year in appeal.

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Issues: Whether penalty under section 271(1)(c) was leviable where the assessment addition arose from estimated gross profit on alleged non-genuine purchases.

Analysis: The additions were made on an estimate basis in respect of purchases treated as non-genuine. The finding was that the Revenue had not fully established concealment of income or furnishing of inaccurate particulars. Mere estimation of profit, without a clear finding of concealment, was held insufficient to sustain penalty.

Conclusion: Penalty under section 271(1)(c) was not sustainable and was directed to be deleted for each assessment year in appeal.

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