This is appeal preferred by assessee disputing levy of penalty in sum of Rs. 1,790 made by ITO under s. 27(1) (c) and confirmed by CIT (A). assessment year involved is 1977-78. There had been raid at premises of assessee and in course of that voucher was found in sum of Rs. 1,814 which indicated despatch of goods to M/s. Parkash Vastra Bhandar by means of post parcels which did not find place in account book of assessee. assessee's contention was that same was on account of samples sent. While framing assessment.the ITO made estimated lump sum addition in sum of Rs. 8,000 and while doing so observation made by him reads as under: " In view of facts and circumstances discussed above, there is reasons to infer that assessee has not properly accounted for sale represented by katcha vouchers and post parcels. explanation offered is also not fully satisfactory. As estimated, lump sum addition of Rs. 8,000 will be made to business profits shown on account of above discrepancies. It was on account of this addition of Rs. 8,000 that income-tax officer levied penalty in sum of Rs. 1,790 on basis of tax sought to be evaded. While levying penalty, ITO observed that "assessment in this case was completed on total income of Rs. 1,04,760 which included addition amounting to Rs. 8,000 on account of profits earned by assessee on suppressed sales." When said penalty came to be disputed before CIT (A) he confirmed same as per observation in para 2 which reads as under: " 2. At time of hearing before me of AR of appellant firm merely reiterated what had already been contended by him during course of assessment proceedings which had already been duly considered in assessment order itself wherein addition of Rs. 8,000 had been made which has also become final. Thus, after keeping various facts of case in view, I have no hesitation in my mind in agreeing with ITO that appellant firm has not fully accounted for sakes made by it and has also been restoring under invoicing sales as is clear from kacha bills seized during course of raid under s. 132. Hence on basis of these facts and in absence of any satisfactory explanation given by appellant firm on this score. ITO was justified in imposing penalty under s. 271(1)(c) and since penalty imposed is minimum impossible in this case, same is upheld." While disputing above finding ld. Counsel for assessee submitted that it was again nothing but rejection of assessee explanation. It is not impossible for anyone to send samples free of cost and in instant case assessee is not so small assessee that samples of Rs. 1,800 would be considered very heavy as total income assessed in instant case is above Rs. one lac. ld departmental representative on other hand relied on order of CIT(A). After taking into consideration rival submission and going through orders of two lower authorities both in respect of assessment and penalty, we are unable to confirm action of CIT(A). When we carefully go through order of CIT(A), we find that it was in absence of any satisfactory explanation given by assessee firm that he observed that ITO was justified to impose penalty. Undoubtedly, fact of raid or search and seizure does effect Revenue authorities mentally about conduct of assessee but even, in such cases there can be explanations which are made available and sometimes also accepted in instant case it was explanation not having been found satisfactory that addition was maintained. Secondly addition was in lump sum form. Levy of penalty in instant case is not called for and same is, therefore, hereby cancelled. In result, assessee appeal is allowed. *** M. K. JAIN HOSIERY v. INCOME TAX OFFICER