Sarkar, J. - (1.) This is an appeal against a judgment of the High Court at Bombay given on a case stated to it under the Income-tax Act and answering in the affirmative the following question: "Whether the levy of Rs. 68,501/- as penalty for concealment in the original return for the assessment year 1951-52 is legal -
(2.) The question arose in the assessment of the appellant, a firm for the year 1951-52 in respect of which the accounting year was the calendar year 1950. The assessee carried on business at Surat. It had a branch at Bangkok to which it exported cloth from India. The branch also made purchases locally and sold them. During the last world war the business at Bangkok had been in abeyance but it was restarted after the termination of the hostilities.
(3.) In its return for the assessment year 1949-50 the assessee did not include any profit of the Bangkok branch but stated that the books of account of the Bangkok branch were not available and that therefore its profit might now be assessed on an estimate basis subject to action under S. 34 or 35 on production of statement of account. The assessment was thereupon made on the basis of profit as 5 per cent on the export to Bangkok branch appearing in the Surat books.;