TRADERS AND TRADERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is a registered firm carrying on business in agencies with its head office at Madras and branches at Salem, Calcutta, Vijayawada, Bangalore and Hyderabad. THE assessee filed a return for the assessment year 1966-67 disclosing an income of Rs, 1,65,826 as shown in the profit and loss account and the computation of income under various heads. THE assessment was completed for the said assessment year on March 30, 1971, on a total income of Rs. 4,86,289. THE Income-tax Officer made an addition of Rs. 1,50,000 as profits arising out of the customs clearance permits obtained in the name of French India Traders, a concern, which was held to be a benami of the assessee.

(2.) FOR the assessment year 1967-68, the assessee filed a return on March 23, 1968, disclosing an income of Rs. 2,70,315 and a revised return was also filed on May 3, 1969, admitting an income of Rs. 3,67,960. The Income-tax Officer made an addition of Rs. 9,68,750 being the profits arising out of the customs clearance permits obtained in the name of French India Traders, and added the said amount to the total income returned by the assessee and determined the total income at Rs. 14,02,802. The Income-tax Officer also initiated proceedings of penalty for concealment of income for both the assessment years and referred the matter to the Inspecting Assistant Commissioner in terms of section 274(2) of the Income-tax Act, 1961.