N.V. BALASUBRAMANIAN J.

- The assessee is a registered firm having branches at various places, one of which is Lala Gopikrishna Gokuldas Agencies, Bombay. The Income-tax Officer, for the assessment year 1966-67 made an addition of Rs. 1, 50, 000 treating the assessee as a beneficiary of the customs clearance permits issued in the name of Messrs. French India Traders. The said French India Traders, Pondicherry, were issued customs clearance permits with c.i.f. value of Rs. 21, 70, 678. According to the Income-tax Officer, a syndicate was formed consisting of Madhusudan Gordhandas and Co., Naraindas Gohimal, Sohanlal Sharma and Balwant Singh Bawa and the said syndicate had paid to the said French India Traders a sum of Rs. 1, 50, 000 in cash in July, 1965, Rs. 7, 50, 000 by way of cheques issued by Babubhai and Sons, Bombay, in April and June, 1966, and Rs. 2, 18, 750 by way of consignment of thin-walled bearings. As regards the first item of Rs. 1, 50, 000, the assessee showed receipts of Rs. 20, 000, dated July 21, 1965, by drafts on Bank of India and Rs. 80, 000 dated July 14, 1965, by cash through Balwant Singh Bawa. The accounts showed that the amounts were originally