JUDGMENT judgment of court was delivered by A. M. Sapre J. This is income-tax reference made by Incometax Appellate Tribunal (Tribunal) at instance of assessee under section 256(1) of Income-tax Act, 1961, in R. A. Nos. 59 and 60/Ind/1998 dated January 15, 2004, which arises out of order dated February 12, 1998, passed by Tribunal in I. T. A. No. 706/Ind/1992 and I. T. A. No. 1000/Ind/1993 to answer following questions of law said to arise out of aforementioned appellate orders: 1. Whether, on facts and in circumstances of case, Tribunal is justified in law in confirming addition of Rs. 30,000 as concealed income of assessee? 2. Whether, on facts and in circumstances of case, Tribunal is justified in justifying levy of penalty of Rs. 18,000 under section 271(1)(c) of Income-tax Act, 1961? dispute relates to assessment year 1988-89 and it centres around question as to whether Assessing Officer, Commissioner of Incometax (Appeals) and Tribunal were justified on their part in imposing and then upholding addition of Rs. 30,000 in total income of assessee as income from undisclosed source and then were justified in consequence to impose and uphold amount of Rs. 18,000 by way of penalty under section 271(1)(c) of Act. assessee is firm engaged in business of cotton ginning and pressing. They filed return for assessment year in question declaring their income of Rs. 1,54,780. However, Assessing Officer completed assessment by his order dated February 20, 1989, on total income of Rs. 1,87,780 which included addition of Rs. 30,000 as income from undisclosed source. This led to initiation of penalty proceedings under section 271(1)(c) of Act as in opinion of Assessing Officer, addition of Rs. 30,000 was in nature of concealment and not disclosure of true income. assessee gave following explanation to impugned addition: That in course of assessment proceedings assessee has offered explanation regarding sum of Rs. 30,000 credited into books on December 23, 1986, and also substantiated same with material facts and evidence. In this connection your attention is invited towards assessee s letter dated January 25, 1989, submitted before Income-tax Officer in course of assessment proceedings, wherein full facts regarding credit of Rs. 30,000 has been explained with material evidence. From assessment order, it is evident that explanation offered by assessee has been disbelieved and aid has been termed as afterthought. explanation offered and bona fide substantiated by assessee has not been found false in assessment proceedings. In short expla nation offered and substantiated by assessee has been disbelieved /discharged and sum of Rs. 30,000 has been assessed on account of alleged concealed income which does not ipso facto constitute concealed income of assessee. assessee has filed second appeal before Tribunal challenging addition of Rs. 30,000. It is this explanation which did not find favour either with Assessing Officer or with Commissioner of Income-tax (Appeals) and lastly, with Tribunal giving rise to making of this reference by Tribunal at instance of assessee. Heard Shri K. R. Mandovara, learned counsel for applicant and Shri R. L. Jain, learned senior counsel with Ku. V. Mandlik, learned counsel for non- applicant. Having heard learned counsel for parties and having perused record of case, we are inclined to answer questions referred against assessee and in favour of Commissioner of Income-tax (Revenue). This is what Tribunal has held while dismissing appeal filed by assessee thereby upholding penalty: We are inclined to agree with above findings of Commissioner of Income-tax (Appeals), as no material has been brought on record by assessee to substantiate explanation offered by it before Assessing Officer, in its reply dated January 25, 1989. In our opinion, explanation of assessee has rightly been rejected as only afterthought. We, accordingly, reject both grounds of assessee. 4. In result, appeal is dismissed. In our considered opinion, it is difficult to take different view than one taken by three authorities on basis of factual explanation offered by assessee on question involved, i.e., addition of Rs. 30,000. In first place, it is case of concealment on part of assessee. Secondly, it is case where assessee made attempt to explain but could not persuade three authorities of his explanation. Thirdly, reference court cannot go into adequacy of explanation again in its reference jurisdiction in abstract form for want of any legal issue/interpretation involved and lastly, once addition is upheld then penalty has got to be imposed consequent upon rejection of explanation offered. In other words, once explanation offered by assessee is rejected then in that event, case for imposition of penalty under section 271(1)(c) is made out. It is much more so when there is no technical issue is involved. In our opinion, looking to question referred and manner in which it is framed, Tribunal seems justified in upholding penalty under section 271(1)(c) of Act. In fact, in view of finding returned on facts only conclusion that could be drawn out of finding was that of imposition of penalty under section 271(1)(c) ibid. Learned counsel for assessee placing reliance on decision reported in Gopichand Gupta v. CWT [1981] 132 ITR 308 (Cal) contended that no case for imposition of penalty is made out in facts of case. We do not agree. case relied on is distinguishable on facts and cannot be applied for deciding question in favour of assessee. In view of aforesaid discussion, we answer questions referred supra against assessee and in favour of Commissioner of Incometax (Revenue). *** Vimal Ginning & Pressing Factory v. Commissioner of Income-tax