Python Time Class definition and methods, use of __init__
It is perfectly fine to implement an __init__ method in this case. I think the only thing you should note is, by the way it's defined, the Time class forces the programmer to give values for hours, minutes and seconds to define a Time object. So, with that constraint in mind, it's really up to you as to whether this is an advantage or disadvantage. Do you want to force the programmer (most likely yourself) to enter these values here? Or should you allow him to first construct an object and then define them later? This is your decision; I don't think Pythoneers will try to sway you one way or another.

Alternatives are (1)  as you've already implied: removal or (2) giving these variables default values.

For example:

def __init__(self,hours=None,minutes=None,seconds=None):
    self.hours =hours
    self.minutes=minutes
    self.seconds=seconds


With the above you are giving the user the option to define these later or now with no penalty either way. Just keep the following simple philosophy of Python in mind:


  Easier to ask for forgiveness than permission


(From the Python Glossary)

I don't really see a point in naming instances. Do you have a rationale for that? Also, if you choose to name them, I think that returning said name after setting is an unexpected behavior and gives the name function more responsibility than it needs.

In your add_time method, I would suggest constructing a new Time object using the values of the self object and then returning that with the incrementation. And, in general, import statements occur at the top of the Python module, unless it is a really special case.

Overall, everything looks pretty good. I hope this was somewhat helpful, if you have any questions be sure to comment.