Concealment penalty not attracted where disclosed claims turned on correct income head and section 54 treatment.

Penalty for concealment was not leviable where the assessee had disclosed the relevant facts in the return and supported the claims with material on record. A claim for rental income under a different head, and a claim for deduction on reinvestment jointly made with her son, involved the correct legal treatment of the transaction rather than suppression of particulars. The later acceptance of the section 54 position reinforced that the issue was one of legal interpretation, not concealment or furnishing of inaccurate particulars. On that basis, penalty under section 271(1)(c) was deleted.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable on the assessee for claiming rental income under a different head and for claiming deduction under section 54 in respect of reinvestment made jointly with her son.

Analysis: The addition in assessment arose from a dispute on classification of income and on the allowability of deduction under section 54. The underlying facts were disclosed in the return and the claim was supported by the material furnished by the assessee. The later acceptance of the assessee's case on the section 54 issue showed that the claim turned on the correct legal treatment of the transaction, not on concealment. A claim that is not accepted in law does not, by itself, establish concealment of income or furnishing of inaccurate particulars. The same principle applied to the treatment of hire charges as income from house property, which reflected a differing head of income rather than suppression of particulars.

Conclusion: Penalty under section 271(1)(c) was not exigible and had to be deleted.

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