For the assessment year 2008-09, the assessee, a contractor, did not file a return of income. The assessment was reopened under section 147 on account of cash deposits in the assessee’s savings bank account. The assessee explained that the deposits represented contract receipts, agricultural income, opening cash balance, withdrawals from the bank and past savings. The Assessing Officer partly rejected the explanation, made an addition under section 68 for want of complete documentary evidence and levied penalty under section 271(1)(c). The Commissioner (Appeals) confirmed the penalty. On appeal the Tribunal held that the addition was based largely on estimation and lack of supporting evidence and not on any conclusive finding that the assessee’s explanation was false or bogus. The explanation offered by the assessee was found to be bona fide. Further, the penalty order failed to specify whether the penalty was imposed for concealment of income or for furnishing inaccurate particulars of income, thereby rendering the penalty proceedings legally unsustainable. Accordingly, the penalty levied under section 271(1)(c) was deleted. (AY.)