1972 (9) TMI 17

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.... had not made any illegal profits, but the illegal profits were made by two of the three members of that association. Aggrieved by that decision, the Commissioner requested the Tribunal to submit to the High Court for its opinion three questions of law, namely : " (1) Whether, on the facts and in the circumstances of the case, the assessment dated October 22, 1962, for the year 1945-46 was validly made in consequence of or to give effect to any finding or direction contained in the Income-tax Appellate Tribunal's order dated November 10, 1960, under section 34(3), proviso 2, of the Indian Income-tax Act, 1922, and as such the assessment in question was not barred by limitation ? (2) Whether, on the facts and in the circumstances of th....

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....urselves as to whether even on the merits the assessment could be sustained. Now, in order to appreciate the question relating to the merits of the addition (sic), it will be necessary to assume that the assessment has been made not on the partners separately but on the firm itself. Now, as we have stated above, this firm consisted of three partners. There was an agreement entered into by them with the Government of Assam, under which they were appointed as agent for procuring paddy and rice and supplying it to the Government. It has got to be taken as an accepted fact in view of Shome Commission's Report that there was good deal of bungling in the procurement of paddy and rice. We have already stated that the Commission known by the name o....

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....ly in respect of procurements made from the agriculturists. Now from the Shome Commission's Report it is apparent that the assessee procured major portion of the rice and paddy from the firm of H. S. Chakraborty and the firm of Khan Bahadur Abdul Karim Chowdhury, which were licensed dealers. It may be stated that these two persons, Mr. H. S. Chakraborty and Khan Bahadur Abdul Karim Chowdhury, although being partners of the assessee-Syndicate, had established their separate firms also and had become licensed dealers. The assessee got all its procurement through those firms. Naturally, therefore, the profiteering in the procurement and supply of paddy and rice cannot be attributed to the assessee-Syndicate. The profiteering that has been made....