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return. However, petitioner did not include the remaining
$1,560,871.04. Of this amount $1,049,244.20 was attributed in
the CTC receipts journal to Diesel Power commissions. Moreover,
at least two of GM's total 1975 commission payments, in the
amounts of $334,333.17 and $396,562.22, were commissions for
locomotives in Pakistan. CTC paid approximately 70 percent of
these Pakistani commissions, in the amounts of $234,033.22 and
$277,593.56,8 to Mr. Khilnani's Amelia Corporation. Petitioner
did not include the amount of the payments to the Amelia
Corporation as income in the 1975 CTC receipts journal or include
them in his 1975 income. Petitioner did, however, later include
the Amelia Corporation payments in an amended return.9 On the CTC
cash receipts journal, the balance of $100,299.95 and $118,968.66
was split between CTC and Diesel Power, 40 percent for the
former, 60 percent for the latter.
8 Payment was stopped on this check because it was lost in the mail, and,
on Feb. 2, 1976, Mrs. Conway confirmed a telephone request to transfer
$277,593.56 from the CTC CNB account to an account in the name of the Amelia
Corporation in Geneva.
9 On Dec. 20, 1976, petitioner filed an Amended U.S. Individual Income
Tax Return for the taxable year 1975 on matters unrelated to this issue. On
Feb. 22, 1978, a second Amended U.S. Individual Income Tax Return was filed by
petitioner for the taxable year 1975. On the latter return, petitioner
increased his previously reported commission income by $511,627 which is
equivalent to the sum of the two previously discussed 1975 payments to Amelia
Corporation. On the 1975 second amended return, petitioner also increased his
commission expense by this same amount. Adjustment a.3. of the notice of
deficiency for 1975 decreased petitioner's reported commission expense in the
amount $355,112.79. Of this adjustment $234,033.22 is attributable to
payments made by CTC to the Amelia Corporation.
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