Penalty for disclosed stock difference under MAT provisions was deleted because the income was not concealed.

Penalty under section 271(1)(c) was held unsustainable where the stock difference had already been disclosed in the return of income and the dispute arose only from its exclusion from book profit under section 115JB for MAT purposes. On these facts, the amount could not be treated as concealment of income or furnishing of inaccurate particulars, because the issue concerned tax treatment rather than non-disclosure. The penalty was therefore rightly deleted and the penalty order was set aside in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the stock difference was disclosed in the return of income but was not included in the book profit under section 115JB.

Analysis: The stock difference was already offered in the return of income and the return was accepted. The penalty was imposed only because the amount was not routed through the profit and loss account and was therefore excluded from book profit under section 115JB. On these facts, the disclosure could not be treated as concealment or furnishing of inaccurate particulars, since the disputed amount was part of the computation and the issue arose from the treatment of the amount for MAT purposes. In such circumstances, penalty under section 271(1)(c) is not attracted unless the statutory conditions for concealment or inaccuracy are clearly established.

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

Final Conclusion: The appeal succeeded and the penalty order was set aside.

Ratio Decidendi: Penalty for concealment or furnishing of inaccurate particulars cannot be sustained where the relevant income has been disclosed in the return and the dispute relates only to its tax treatment under MAT provisions.

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