Penalty for estimated income enhancement deleted where no clear concealment or inaccurate particulars were established.

Penalty under section 271(1)(c) was held unsustainable where income was enhanced by applying a higher commission rate on an estimated basis for alleged accommodation-entry activity. The adjustment rested on a difference of opinion and a non-scientific estimation, not on a clear finding of concealment or furnishing of inaccurate particulars. As the addition did not establish the necessary ingredients for penalty, the penalty was deleted in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the income was enhanced on an estimate by changing the commission rate applied to alleged accommodation-entry .

Analysis: The addition was made by estimating the commission income at a higher rate without any scientific basis, while accepting that the assessee was engaged in the alleged activity of providing accommodation entries. The revision of income turned on difference of opinion and estimation rather than on a clear finding of concealment or furnishing of inaccurate particulars. In such circumstances, the penalty could not be sustained.

Conclusion: The penalty was not leviable and was deleted in favour of the assessee.

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