Penalty for non-furnishing of vouchers fails when the transaction is disclosed and concealment is not proved.

Penalty under section 271(1)(c) could not be sustained merely because supporting vouchers were not furnished where the underlying transaction had been disclosed and there was no finding of deliberate concealment. The appellate reduction of the quantum addition on the basis of evidence further showed that the case was one of deficient substantiation, not concealment. The penalty was deleted.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the addition in quantum proceedings was restricted for want of supporting vouchers and the assessee had disclosed the transaction.

Analysis: The addition made in quantum proceedings was substantially reduced by the appellate authority on the basis of evidence produced by the assessee. The penalty was initiated and sustained only on the ground that supporting vouchers were not furnished. Non-production of vouchers, by itself, was held not to constitute concealment of income where the transaction itself had been disclosed and the case did not disclose a finding of deliberate concealment.

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

Ratio Decidendi: Penalty under section 271(1)(c) cannot be sustained merely for non-furnishing of vouchers or supporting evidence when the underlying transaction has been disclosed and concealment is not established.

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