Judgment 1. The Revenue has approached this Court by raising the following substantial question of law arising out of the order of the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, in I.T.A. No. 509 (ASR) of 1999 for the assessment year 1988-89 whereby the penalty, levied under Section 271(1)(c) of the Income-tax Act, 1961 (for short "the Act"), has been set aside by the Tribunal: Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal is justified in law in deleting the penalty as per annexure P-7 when the credit was considered ingenuine by the honble Income-tax Appellate Tribunal in this case in Appeal No. 1136 (ASR) of 1991 vide order dated November 16, 1998, as per annexure P-4, against which no further appeal was preferred by the assessee in the honble High Court of Punjab and Haryana. 2. We have heard learned Counsel for the Revenue and perused the record. 3. The Income-tax Officer vide order dated May 26, 1999, levied penalty of Rs. 38,753 on the assessee under Section 271(1)(c) of the Act. The assessee failed in his appeal before the Commissioner of Income-tax (Appeals), however, the Tribunal accepted the appeal by recording the following finding in para. 6.4: 6.4 Coming back to the facts of the instant case, it is found that the assessee furnished the explanation in support of the genuineness of the cash credits appearing in the name of Sh. Harnek Singh by producing him in person and getting his statement recorded. The transactions of receipt and repayment of loan were routed through banking channels. Sh. Harnek Singh categorically admitted of having advanced the sum to the assessee-firm. Simply because the said Sh. Harnek Singh could not appropriately explain the name of the bank and location from where the draft was purchased, despite the fact that it was actually purchased by him, and some other extraneous consideration may justify the rejection of the explanation for sustaining an addition in quantum, but are not sufficient enough to disprove the assessees explanation in support of the genuineness of the transaction so as to visit the assessee with the penalty under Section 271(1)(c). In view of these facts, we are satisfied that the learned Commissioner of Income-tax (Appeals) was not justified in upholding the penalty order. 4. In view of these facts, we are satisfied that the learned Commissioner of Income-tax (Appeals) was not justified in upholding the penalty order. 4. The argument of learned Counsel for the Revenue is that when the additions have been upheld, therefore, the penalty should automatically be upheld. This is not the position in law as the penalty proceedings are independent proceedings. The Tribunal has accepted the explanation furnished by the assessee to quash the penalty. Merely because a second opinion may be possible on the explanation furnished by the assessee, this Court would not like to substitute the same. In our view no substantial question of law arises, the appeal is dismissed.