Judgement

BHAGWATI, J. : This is an appeal with certificate under S. 66-A(2), India Income-tax Act, 1922 from the judgment and order passed by the High Court of Judicature at Calcutta on a reference under S. 66(1) of the Act, whereby the High Court answered the referred question in the negative.

2. The appellant, is a timber merchant. On 5-2-1930 he obtained a loan of Rs. 1 lakh for the Bank of India on the joint security of himself and one Mamraj Rambhagat. On the same day Mamraj Rambhagat obtained a loan of Rs. 1 lakh from the Imperial Bank of India, Bombay on the joint security of himself and the appellant. The appellant paid off his loan of Rs. 1 lakh to the Bank of India but Mamraj Rambhagat failed to make good the amount of his loan to the Imperial Bank of India, Bombay. This sum of Rs 1 lakh was realised by the Imperial Bank of India from the appellant with interest of Rs. 626 on 24-3-1930.

3. Mamraj Rambhagat failed in his business and his estate went into the hands of the receivers on 25-4-1930. The appellant opened a ladger account in the name of Mamraj Rambhagat and the total amount of Rs. 1,00,626, was debited to this account. The appellant received the dividents from the