Ramanujam, J.

1. The assessee herein is a registered firm carrying on business in pharmaceuticals, chemicals, drugs and money-lending. For the assessment year 1971-72, corresponding to the previous year ended October 30, 1970, it filed a return showing an income of Rs. 1,22,180. While going through the accounts of the assessee, the ITO found that the capital account of the partners showed a credit of 1/3rd share of sale proceeds of the house property Nos. 161 and 162, Nyniappa Naicken Street, Madras. The said two properties had been purchased on June 14, 1948, and February 1, 1950, by the firm and the income from these properties were being assessed in the hands of the firm until the assessment years 1964-65. During the accounting year ended November 4, 1964, entries had been made in the books of the firm removing these properties from the partnership assets and showing them as the individual properties of the partners and for the income from the property there has also been a return filed by the partners as individuals and that has been accepted by the Revenue for some years. On October 15, 1970, these properties were sold to a third party for Rs. 2,00,000. The said sale de