This appeal by assessee is directed against order of AAC dt.18th Nov.,1982 relating to asst. yr. 1976-77 confirming penalty of Rs. 8,000 levied by ITO under s. 271(1)(c)of IT Act, 1961. We have heard parties. ld. counsel for assessee submitted that on facts of case there is no case for imposition of penalty, as done by authorities below, because penalty has been imposed on account of mere difference between value of house fixed by Valuation Officer as claimed against actual cost of construction of house incurred by assessee. He submitted that this position on facts is so clear that no one could reasonably come to conclusion that penalty is leviable upon assessee for concealment of income to extent of Rs. 8,000. ld. counsel for assessee submitted that even if it may be argued that penalty is imposable because difference has been considered as income of assessee and this addition has been upheld in appeal it can be said to be at worst case where explanation of assessee has not been accepted and when such explanation is not accepted, there is no case for imposition of penalty. ld. counsel relied upon following judgments in support of his arguments: (1) Bhagirath Prasad Bilgaiya vs. CIT (1980) 19 CTR (MP)289 (2) CIT vs. Mohammed Kunhi (1973)87 ITR 189(Ker) (3) CIT vs. Patna Timber Works 1975 CTR (Pat)25:(1977)106 ITR 452(Pat) (4) Amuldas vs. CIT (1982)27 CTR (MP)339:(1983)144 ITR 848(MP) On other hand ld. departmental representative submitted that authorities cited by ld. counsel for assessee are not relevant for determination of issue in appeal before us. According to him, issue can be decided in view of judgment of Punjab and Haryana High Court in case of CIT vs. Fazilka Dabwali Transport Co. (P) Ltd.(1981)129 ITR 15 (P&H). ld. departmental representative submitted that it is clear that assessee had invested funds more than cost of construction shown, as is evident from fact that estimate of cost of construction made by Valuation Officer has been upheld even by Tribunal. It is, therefore, clear case where penalty is exigible under s. 271(1)(c)of Act. After giving careful consideration to rival submissions we find no justification for sustaining imposed penalty. In order to appreciate why this penalty not sustainable we bring into focus factual background of this case. assessee is HUF. It has orchard for oranges and also has business for purchase and sale of oranges. For asst. yr. 1976-77 return of income was filed on 19th July, 1976 declaring income of Rs. 9,200. It appears that assessee had been assessed earlier in status of individual. However, for year under appeal is revised return status of HUF was claimed and it was accepted by ITO because for purpose of wealth-tax status of HUF had been adopted. ITO found that assessee had entrusted house at Pandurna for which cost was shown at Rs. 76,000. In support of cost of construction, certificate from approved valuer Shri B.N. Chatterjee was filed. assessee also pointed out to ITO that said house had been constructed under self-supervision resulting in savings. ITO however, as claimed referred matter to Departmental Valuation Officer for determining cost of construction of building. Valuation Officer estimated cost at Rs. 84,500. Though ITO refers to this valuation given by Departmental Valuer, he has not recorded when reference was made to him and what is date of valuation. impugned order was made by him on 13th Feb., 1979 in which he added sum of Rs. 15,000 considering it as income from undisclosed sources having been invested in construction of house by assessee. This was done after considering reply given by assessee to queries raised about cost of construction as per letter dt. 29th Jan., 1979. In this letter assessee had submitted that if savings effected on account of personal supervision is taken into consideration cost would be roughly Rs. 84,660. assessee had further submitted that upto asst. yr. 1975-76 he had with him savings to extent of Rs. 1,05,000, out of which cost of construction of house could easily be met. However, assessment made by ITO on 13th Feb., 1979 adding Rs. 15,000 to total income of assessee was confirmed in appeal by AAC and finally by Tribunal vide order bearing ITA No. 565(Jab)/1981 dt. 23rd Sept., 1983. In order of Tribunal appearing at pages 6 to 8 of paper book, it was finally concluded that, "it is, therefore, difficult to believe that assessee had in his possession cash amount as high as Rs. 84,500. Keeping in view all these circumstances, we are of opinion that there is no force in assessee's appeal, which is hereby dismissed." Now, when penalty proceedings were going on, assessee filed explanation dt. 16th March, 1982 appearing at pp. 9 to 14 of assessee's paper book. In this explanation, assessee pointed out that though ITO has mentioned in assessment order that value of house constructed by assessee was got determined from Valuation Cell, yet, in fact, ITO had not referred case to Valuation Officer for estimating cost of construction of this house. In this letter it was further submitted that explanation given by assessee for source of cost of construction vide letter dt. 29th Jan., 1979 had not properly been considered and addition of Rs. 15,000 was erroneously made. assessee further made assertion that factum of ITO not making reference to Valuation Officer becomes clear from order sheet entry dt. 20th Jan., 1978, in which ITO had himself estimated cost of construction at Rs. 85,000. assessee reiterated that as on 31st Feb., 1975 in wealth-tax return for asst. yr. 1975-76, for which valuation date was 31st March, 1975, assessee had shown cash in hand and in business investment to tune of Rs. 1,05,000, which had been accepted. It was, therefore, pointed out in this letter that as on 31st March, 1976 assessee had sufficient funds for investment in construction of house. Therefore, not only there was no justification for imposition of penalty, whatsoever, for concealment of income, it was asserted there was no case for addition of Rs. 15,000 to total income of assessee, though it had already been confirmed by appellate authorities. It was particularly submitted that mere difference between estimated cost of construction and actual cost of construction shown by assessee cannot justify imposition of penalty upon assessee. In this regard it was pointed out that two technically qualified persons, namely, registered valuer, who gave cost of construction for assessee at Rs. 76,000 and Departmental Valuation Officer if he had at all been consulted, gave cost of construction Valuation Officer if he had at all been consulted, gave cost of construction differently and, as such, even two technically qualified persons did not agree on cost of construction. Therefore, on mere difference in two figure penalty could not be imposed and in penalty proceedings fresh look be given to these facts and penalty proceedings dropped. assessee particularly projected to ITO that it is not guilty of conscious concealment and if there is any fault in accordance with law, because of different valuations adopted than actual cost of construction, fault is technical one, for which penalty could not be imposed upon assessee. Ultimately, prayer was made that penalty proceedings be dropped. ITO surprisingly made short of all these submissions and held view that, "the assessee had concealed particulars of his income or furnished inaccurate particulars of his income." This observation be justified on ground that cost of construction as per approved valuer, was Rs. 76,000, whereas, departmental valuer had determined it at Rs. 84,500. ITO appears to have avoided allegation made by assessee in letter that actually valuation was not got done from Valuation Officer by ITO during course of assessment proceedings. This is so, because he has merely observed that counsel's plea of determination of cost of construction by non-technical person is baseless and false. He further observed that departmental valuer happens to be technical person, who is appointed by Government for purpose of valuation only. However, but for these assertions, ITO has not mentioned when and how matter was referred to Valuation Officer for valuation of cost of construction of property. Therefore, allegation of assessee remains unrebutted that actually valuation was not referred to Valuation Officer and ITO merely relied upon his own estimate, though in assessment proceedings and in proceedings that were subsequently taken up in appeal, this fact has not been clarified. After this observation in order, ITO has merely thought it fit to impose penalty of Rs. 8,000, for which no basis has been explained in impugned penalty order. From what is spelt out above it is clear that no case has been made out either of concealment or of furnishing inaccurate particulars by assessee. This is apparently case where penalty has been levied merely because difference arose between estimated cost of construction by ITO and actual cost of construction claimed to have been made by assessee. ITO did not himself find any investment in house, for which assessee had not given any explanation or had not shown any expenditure. Therefore, it is clear case where charge of concealment cannot be fastened upon assessee. It is to be noted that ITO had gone on premise that assessee concealed particulars of his income or furnished inaccurate particulars thereof. Apparently, ITO was not sure, whether it is case of concealment of income or furnishing of inaccurate particulars of income. When matter came up in appeal before AAC, he has justified action of ITO by observing that "penalty has been levied under Expln. I to s. 271(1)(c)". But, for this, he failed to appreciate that there was no such finding given by ITO in his impugned order dt. 27th March, 1982. ITO had clearly levied penalty, as observed by him, for concealing particulars of income or furnishing inaccurate particulars thereof. We do not find anything in impugned penalty order from which AAC could infer that penalty levied by ITO is under Expln. 1 to s. 271(1)(c). Therefore, his approach has been apparently untenable. However, even if we were to consider that Explanation to s. 271(1)(c)could be invoked in this case, we have to remember guidelines laid down by Patna High Court in case of Patna Timber Works 1975 CTR (Pat) 25:(1977)106 ITR 452(Pat), where Hon'ble High Court has observed as under: "The standard of proof applicable to prove positive fact and one which is required to prove negative fact cannot be same. high standard i s always applied for proof of positive fact while standard of preponderance of probability is sufficient to prove negative fact. assessee, within meaning of Explanation, is required to prove that failure to return correct income did not arise from any fraud or gross or wilful neglect on his part. Ordinarily and generally, there cannot be any direct evidence to prove such fact. assessee merely has to place materials of primary facts or circumstances which in all reasonable probability would show that he was not guilty of any fraud or gross or wilful neglect. He may discharge this onus was not guilty of any fraud or gross or wilful neglect. He may discharge this onus by placing facts found in assessment order to show that facts found therein had not in least given inkling of fraud or gross or wilful neglect on part of assessee and, therefore, it must be held without proof of any other fact that there was no fraud committed by assessee in his failure to return correct income nor was he grossly or wilfully negligent". Bearing in mind above observations when we examine case before us, we find that assessee has not been found in position where it could be said that difference between assessed income and returned income was due to any fraud or gross or wilful neglect on his part. In fact, explanation of assessee was simple and addition was on mere difference of opinion of various persons as to what should be cost of construction. This even if we were to consider applicability of Explanation, as mentioned by AAC, we find that Explanation has no application to facts of case before us. On none of counts, therefore, penalty is imposable upon assessee. authorities below erred in penalising assessee in manner done by them. We cancel their order and allow appeal of assessee. Appeal is allowed. *** VYANKATISO ZINGUJI KOLLHE v. INCOME TAX OFFICER