Concealment penalty needs positive evidence; rejected explanation and bank certificate alone did not justify penalty.

Penalty under section 28(1)(c) of the Income-tax Act, 1922 requires material from which concealment of income or deliberate furnishing of inaccurate particulars can be inferred. Mere rejection of the assessee's explanation is insufficient; the bank certificate only showed that goods had been pledged with the bank in quantities exceeding those in the stock books and did not by itself prove false stock accounts or concealment of income. In the absence of cogent positive evidence of concealment, the penalty could not be sustained, and the view that no penalty was exigible was upheld in favour of the assessee.

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Issues: Whether penalty was exigible under section 28(1)(c) of the Income-tax Act, 1922 on the facts found, and whether mere rejection of the assessee's explanation or the bank certificate constituted sufficient material to prove concealment of income.

Analysis: Penalty under section 28(1)(c) requires material from which concealment of income or deliberate furnishing of inaccurate particulars can be inferred. The bank certificate showed only that goods had been pledged with the bank in excess of the quantities reflected in the stock books; it did not by itself establish that the stock accounts were false or that income had been concealed. The explanation offered by the assessee was not accepted, but non-acceptance of an explanation, without cogent positive evidence of concealment, is not enough to sustain a penalty.

Conclusion: Penalty was not exigible, and the view that no penalty could be imposed was upheld in favour of the assessee.

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