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Issues involved: Appeal against deletion of penalty u/s 271(1)(c) of the IT Act, 1961 for AY 1995-96.
Facts: The assessee, a partnership firm, filed return declaring loss. During a survey, partner declared additional income of Rs. 20 lakhs as commission, later retracted. AO assessed income @ 27.65% of Rs. 20 lakhs. CIT(A) reduced GP rate to 16.81%. CIT directed to treat Rs. 20 lakhs as commission income. Tribunal confirmed CIT's action, noting shift from commission income to undisclosed sales. AO added Rs. 20 lakhs to total income. Penalty imposed u/s 271(1)(c) by AO. Reasoning: CIT(A) cancelled penalty due to: (i) discrepancy in initiating penalty for inaccurate particulars vs. concealment of income, (ii) lack of satisfaction by AO on quantum addition, (iii) multiple opinions by Department. Tribunal upheld CIT(A)'s decision, considering absence of concrete evidence to support penalty imposition. Analysis: Retraction letter highlighted absence of unrecorded documents or cash during survey, accepted by Department initially. No concrete evidence presented to contradict retraction. Strong presumption cannot substitute conclusive evidence for penalty imposition. CIT(A) rightly deleted penalty based on lack of concrete evidence supporting penalty imposition. Conclusion: Tribunal upheld deletion of penalty, dismissing Revenue's appeal.
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