Judgement

RAMASWAMI, J.:- This appeal is brought, by special leave, from the judgment of the Calcutta High Court dated March M, 1964 in Income-tax Reference No. 29 of 1961.

2. The respondent (hereinafter called the assessee ) is an individual carrying on business in Jute, Cloth and Films. The assessment year is 1952-53, the corresponding accounting year being the calendar year 1951 for all business except Katihar Cloth Importing Co. and the Jute Mills for which the accounting year is financial year ending March 31, 1952. During the year of account the assessee claimed that he had borrowed three sums of Rs. 2,50,000, Rs. 1,50,000 and Rs. 30,000 from three parties from Nepal, Kharag Bahadur Nepali, Jiwanmal Santockchand and Sohanlal Subhkaran respectively. The Income-tax Officer added these amount to the total income of the assessee on the ground that the assessee had inflated the purchase of raw jute. The Income-tax Officer was not satisfied that these three were genuine loans but considered that they represented secret profits made by the assessee by inflating the purchase of raw jute. The income-tax Officer noted that the assessee had withdrawn at Calcutta on March 31, 1952, a sum