P.J. GORADIA, A.M. All these appeals involve common ground in respect of deletion of penalty levied under s. 271(1)(C) of IT Act, 1961. assessee is individual engaged in business of real estate. Because of search operations carried on 23rd Sept., 1978 original assessment was reopened under s. 147(a)/148 of IT Act assessment was completed for all years on 26th April, 1980 additions were made on various amounts for unexplained investments in names of promoters. ITO initiated penalty proceedings and levied penalty to maximum extent on basis as found in para 3 of order passed for asst. yr. 1970-71, same is reproduced below: "As discussed earlier, assessee during proceedings under s. 143(3) while finalising assessment has mentioned and agreed before CIT for making payments of determined taxes in connection with proceedings initiated for completion of reopened assessments, I am convinced that in absence of any defence, assessee has admitted default for concealment of income to extent mentioned above i.e. Rs. 9,000 and as concealment of income has been determined on basis of information gathered during operation under s. 132 of IT Act, It is confirmed that assessee has committed default and, therefore, I impose maximum penalty under s. 271 (1)(c) of IT Act which comes to Rs. 18,000." On appeal, penalties were deleted on ground that assessments were finalised on agreed basis. Before us, ld. Departmental Representative submitted that in statement of oath recorded under s. 132(4) of Act on 17th Oct., 1978 in reply to question No. 40 assessee admitted that some of promoters were benamidars of assessee and investments belonged to assessee. No doubt assessee had filed settlement petition to CIT agreeing to proposed additions on condition that no penalty should be levied. assessment was completed independent of settlement petition. addition was made under s. 69 of Act and since income was deemed income and admission was made by assessee there was nothing further to prove by Revenue for purpose of levy of penalty. Reliance was place on Lok Nath Chowdhary vs. CIT (1986) 50 CTR (Cal) 340: (1965) 155 ITR (Cal) 29, Abu Bucker Sait vs. CIT (1978) 76 ITR 362 (Mad) and H.V. Venugopal Chettiar vs. CIT (1985) 153 ITR 376 (Mad), bringing to our notice decision in Western Automobiles (India) vs. CIT 1977 CTR (Bom) 303: (1978) 112 ITR 1048 (Bom) it was submitted that where cash credits were accepted as unexplained same was treated as income of year. On query from Bench in respect of decision of Gujarat High Court in case of CIT vs. Vinay Chandra Harilal (1979) 8 CTR (Guj) 247: (1979) 120 ITR 752 (Guj) it was submitted that facts were distinguishable mainly on aspect that there was no raid, there was no collection of evidence by Revenue and no statement accepting benami nature and further that case was concerned with peak amount required to be added. assessee again did not avail of opportunity granted by Revenue before levying penalty. ld. Counsel for assessee highlighted factual aspect by bringing to our notice initial notice issued by Revenue under s. 132(5) of Act proposing to make addition of Rs. 12,00,000 approximately out of which about Rs. 7 lakhs were for unexplained investments and rest for domestic expenditure etc. Again, inquiry ran over period of several years and ultimately Revenue could make addition of Rs. 18,000 and that too, to be spread over number of years. Probably this was only cost of pains taken by Department because hardly addition offered by way of acceptance amounted to 1.5 per cent of proposed condition and besides price for buying peace so as to get relief from pending litigation, enquiries etc. total tax on addition was hardly negligible being Rs. 4,000 approximately and Department was keen on penalising assessee to extent of Rs. 36,000. In fact, this was case where Department should have fairly withdrawn appeal especially when assessee was put to lot of troubles and nothing was found. settlement petition submitted was heard by CIT on 28th March, 1980. It was not rejected so far. Since assessment was on agreed basis it was not open for Department to accept part of terms of agreement offered without being bound by condition on which addition was agreed to. ratio of decision in case of Vinaychandra Harilal (supra) directly applied to facts of case of Revenue has not brought anything on record except taking shelter under provisions contained in s. 69 of Act which only empowers addition of deemed income and not actually concealed income. Besides, concealed income has to be of particular year under consideration. In reply, ld. Departmental Representative submitted that proposed quantum and ultimate addition made is irrelevant for purpose of levy of penalty for concealment. One query from Bench it was submitted that settlement petition was dt. 19th March, 1979 and assessments were completed in April, 1980. During course of submissions we had asked for copies of statement on oath settlement petition and assessment order and same were submitted to us after hearing was over. On going through assessment order we find that additions were made in various years on basis recorded in para 5 of order, relevant portion is reproduced here. "Even considering this, there still remains gap of Rs. 16,374 which remains unexplained. Taking into account entire position of case, discussion, arguments and evidences produced by assessee at this stage, I estimate unexplained gap of cash at Rs. 18,000 for all year. Since assessee is doing this business right from 1969 and this is amount which has not been earned in particular year but in number of years. As regards spread over, same is allowed proportionately on basis of investments made by assessee in each year right from asst. yr. 1970-71. On basis of investment amounts in round figures to be added in each year are as under: Asst. yr. 1970--71 Rs. 9,000 Asst. yr. 1972-73 Rs. 3,000 Asst. yr. 1974-75 Rs. 4,000 Asst. yr. 1975-76 Rs. 2,000 Rs. 18,000 Thus amount of Rs. 9,000 is unexplained investment made by assessee". Again, seeing computation of income in assessment order, we find that additions have been made by way of unexplained investments in names of promoters and not by way of income having been found to be concealed one and which required addition tot he income not as unexplained investments by way of deeming income under s. 69 of Act. This apart, ratio of decision in case of Vinaychandra Harilal (supra) is directly applicable to facts of case. principle laid down by their lordships in this case requiring application to facts of case under consideration are (i) Revenue must establish that receipt of amount in question constituted income of assessee, (ii) addition made under s. 69A does not discharge Revenue from burden of proving that addition represented income of particular financial year, (ii) admission of assessee did not mean that assessee admitted addition to be his income from business in particular year in question, and (iv) Revenue has not established that accretion to net wealth of assessee during relevant year under consideration was out of income of year under consideration. On query from Bench, ld. Departmental Representative submitted that settlement petition filed by assessee on 19th March, 1979 was neither accepted by Commissioner nor rejected by him. As against this, ld. Counsel for assessee submitted that assessee was heard by Commissioner on 20th March, 1980. We find from assessment orders of various years that assessments were completed on 26th April, 1980. In view of these facts, we fail to understand how Revenue expects assessees to believe that settlement petition was rejected and more so when first appellate authority himself has given finding that assessment order was made on agreed basis and petition having not been rejected so far by CIT it would lead any body to imagine atleast that there was some link between settlement petition, hearing granted by CIT and addition as proposed by assessee having been made by ITO. Nothing is brought to our notice as to what stopped CIT from passing two lined order if at all he wanted to reject settlement petition which runs into not less than 35 pages, especially so, when hearing was granted. On going through assessment orders for various years, we find that though order is passed by ITO for issue of notice under s. 274/271(1)(c) of Act for asst. yrs. 1970-71, 1972-73, 1974-75 and 1975-76 no such order is passed for asst. yrs. 1973-74, 1976-77 and 1977-78, probably because addition made were of amounts of Rs. 500, Rs. 750 and Rs. 750 respectively. Though no plea is ever taken by assessee that atleast for these years levy of penalty is illegal, yet this aspect is very material as it favours of stand that assessments were made on estimated basis and without there being conclusive finding regarding concealment of income. We uphold, order passed by AAC of IT. In result, all appeals are dismissed. *** INCOME TAX OFFICER v. PATEL