Estimated bogus purchase addition cannot sustain concealment penalty absent definite finding of concealed income.

Penalty for concealment under Section 271(1)(c) was held unsustainable where the quantum addition for alleged bogus purchases was confined to 12.5% on an estimated basis. The underlying reassessment and best-judgment assessment under Sections 147, 148 and 144 did not produce a definite finding of concealed income; instead, the addition rested on estimate and guesswork. In such circumstances, penalty could not be imposed for concealment or furnishing inaccurate particulars. The Tribunal's deletion of the penalty was therefore upheld as consistent with the principle that an estimated addition does not, by itself, justify concealment penalty.

---

---

Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 could be sustained where the quantum addition in respect of bogus purchases was restricted to 12.5% on an estimate basis.

Analysis: The penalty arose from reassessment and best-judgment assessment proceedings under Sections 147, 148 and 144 of the Income-tax Act, 1961. The quantum addition had already been upheld only to the extent of 12.5% of the alleged bogus purchases, and the penalty was set aside by the Tribunal on the footing that the addition was purely estimated. A penalty for concealment or furnishing inaccurate particulars cannot be imposed when the sustaining of income is founded on estimation or guesswork rather than on a definite finding of concealed income.

Conclusion: Penalty under Section 271(1)(c) was not leviable on the estimated addition, and the Tribunal was correct in deleting the penalty.

---