Estimated addition cannot by itself justify penalty for concealment under income tax law; penalty deleted.

Penalty under section 271(1)(c) could not be sustained where the underlying addition was made on estimated profits from alleged bogus purchases. The Tribunal relied on authority that an estimated addition, by itself, does not establish concealment of income or furnishing of inaccurate particulars. On that basis, the estimated nature of the addition was held insufficient to support penalty, and the penalty was deleted.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 could be levied where the addition was made on estimated basis.

Analysis: The addition forming the basis of penalty was made by estimating profits on alleged bogus purchases. Reliance was placed on decisions holding that an estimated profit addition does not, by itself, establish concealment of income or furnishing of inaccurate particulars of income. Following that line of authority, the Tribunal found that the penalty could not be sustained on such estimated addition.

Conclusion: Penalty under section 271(1)(c) of the Income-tax Act, 1961 was not leviable on the estimated addition and the penalty was directed to be deleted.

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