Decided on February 25,1992



J. Eswara Prasad, J. - (1.)The first petitioner in both the revision is a firm. The second petitioner is a partner of the firm, in charge of its affairs. The petitioners are the accused Nos. 1 and 2 in CC. No. 50/87 on the file of the Court of the Special Judge for Economic Offences at Hyderabad, relating to the asst. yr. 1982-83 and in CC. No. 51/87 relating to the asst. yr. 1983-84, along with three others. They were charged with offences punishable under ss. 276C(1), 277 and 278 of the IT Act, 1961. Pending trial, A5 died. A1 (the first petitioner) was found guilty under s. 276C; A2 was found guilty under ss. 277 and 276C read with s. 278 and was sentenced to pay a fine of Rs. 1,000 in default to undergo R1 for one month. He was also sentenced to R1 for 3 months and was directed to pay a fine of Rs. 1,000 in default to undergo R1 for one month on the second charge. A3, another partner of the firm, was acquitted. A4 was found guilty under s. 278 and was sentenced to undergo imprisonment till rising of the Court and to pay a fine of Rs. 1,000, in both the matters by the learned Special Judge.
(2.)Appeals filed by the petitioners and A4 were partly allowed by the learned Metropolitan Sessions Judge, Hyderabad, and the conviction of A4 was set aside and was acquitted. The convictions and sentences imposed against the petitioners was confirmed and their appeals were dismissed. These revisions arise out of the conviction and sentences imposed against the petitioners.
(3.)The first petitioner is an assessee under the IT Act, 1961 ('the Act', for short). For the asst. yr. 1982-83, the firm returned an income of Rs. 19,710 and for the asst. yr. 1983-84, Rs. 21,080. The said returns were signed and verified by the second petitioner. The ITO found that the debit made in the names of two brothers of the second petitioner, namely, G. Ramarao and G. Mallikharjunarao, towards their remuneration is not allowable, as they were not the employees of the firm. He included the debit amount in the income of the first petitioner-firm. Appeals were preferred against the orders of the ITO and were dismissed by the AAC, confirming the assessment orders. The firms filed appeals before the Tribunal which were partly allowed. The learned Special Judge, as well as the learned Metropolitan Sessions Judge held that only accused No. 4, the father of the second petitioner was rendering assistance to the firm and that the brothers, G. Ramarao and G. Mallikharjunarao did not render any assistance at all.

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