1. - On the request of the Revenue, the Income-tax Appellate Tribunal has referred the following question of law under its order dated June 17, 1982, in respect of the assessment year 1974-75 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalty of Rs. 21,500 levied under section 271(1)(c) of the Income-tax Act, 1961 ?"

2. The facts of the case are that the assessee is a manufacturer of groundnut oil and deals in oil and oil-cakes, etc. The assessee has entered into an agreement for the purchase of 43 tonnes of oil-cakes with Smt. Usha A. Agrawal of Bombay on October 18, 1973. A similar agreement for the purchase of 43 tonnes of oil-cakes was entered into with Shri Suresh K. Agrawal on October 23, 1973. The contracts were settled on October 20 and October 24, 1973, respectively, without taking delivery of the goods and the difference of an amount of Rs. 10,750 was paid to each of the parties. The actual payments to these parties were made in the next year and credit was made in the account of the respective parties. During the course of assessment proceedings, the assessee was asked to produce the books of account