Tax authorities have found that Marubeni Corp. intentionally concealed about 600 million yen in income over three years through March 31, 2003, sources close to the case said Saturday.

The major trading house failed to declare a total of about 2 billion yen in income, including a sum stemming from accounting errors, the sources said.

The Tokyo Regional Taxation Bureau, which conducted a tax audit at Marubeni, ordered the company to pay about 100 million yen in additional tax and penalties because the company was temporarily in the red during the period, the sources said.

Marubeni officials said the firm accepted the Tokyo Regional Taxation Bureau's ruling but disputed its reasoning.

"We think our taxation was handled appropriately, but we couldn't bridge the gap" with the taxation bureau, a representative said.

Of the concealed 600 million, yen 300 million yen came from abuse of the consolidated corporate tax system Marubeni introduced in fiscal 2002, which ended in March 2003, the sources said.

In February 2003, Marubeni's oil wholesale subsidiary paid about 300 million yen in sales promotion money to the wholesaler's five units operating gas stations and booked the money as costs when it closed its books in March 2003, the sources said.

But the five companies, which use an accounting period running from January to December, registered the 300 million yen as profits in their earnings reports for the year to December 2002.

As a result, the five firms avoided taxation on the money because they were in the red in the year to December 2002, the sources said.

The tax bureau determined that Marubeni tried to reduce consolidated earnings by transferring profits at the subsidiary to the five group firms, they said.