Double taxation not barred where income belonged to the true owner and was routed through another firm.

Income that truly belonged to the assessee company could be taxed in its hands even though it had already been assessed in the hands of the export firm. The Court held that prior assessment in another person's hands does not bar taxation of the true owner where the amount was concealed and routed through the firm. The principle against double taxation did not apply on these facts because the export firm's assessment did not extinguish the company's liability for its own income. The reference was answered in favour of the Revenue and the addition was upheld.

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Issues: (i) Whether the sum of Rs. 1.71 crores had been included in the income of the export firm for the relevant assessment years. (ii) Whether the same amount could again be assessed in the hands of the assessee company, or whether such assessment amounted to impermissible double taxation.

Issue (i): Whether the sum of Rs. 1.71 crores had been included in the income of the export firm for the relevant assessment years.

Analysis: The facts recorded before the Tribunal and accepted in these proceedings showed that the amount in question had already been brought to tax in the hands of the export firm. The assessee company did not dispute the factual position that the amount formed part of the export firm's income during the assessment years in question.

Conclusion: The issue was answered in the affirmative, in favour of the Revenue.

Issue (ii): Whether the same amount could again be assessed in the hands of the assessee company, or whether such assessment amounted to impermissible double taxation.

Analysis: The principle against double taxation was examined in the light of the nature of the income and the identity of the real owner. The amount had actually belonged to the assessee company, which had concealed it and routed it through the export firm. The Court distinguished cases dealing with representative assessees and beneficial ownership, and held that the export firm's assessment did not absolve the assessee company of liability for income that ually belonged to it. A party cannot rely on its own wrongdoing to avoid tax liability.

Conclusion: The issue was answered against the assessee company and in favour of the Revenue.

Final Conclusion: The reference was answered by upholding the addition of Rs. 1.71 crores in the assessee company's hands, as the amount was not protected from taxation merely because it had also been assessed in the hands of the export firm.

Ratio Decidendi: Where income ually belongs to one assessee, its prior assessment in the hands of another person who has received or utilised it does not bar taxation in the hands of the true owner, and such treatment does not amount to prohibited double taxation.

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