JUDGMENT

BHAGWATI, J.:—The short question which arises for determination in this appeal by special leave is whether there was any material evidence to justify the finding that a sum of Rs. 1,07,350/- was remitted by the assessee from Madras to Bombay and that it represented the un-disclosed income of the assessee. The assessee before us is the firm of M/s. Kishinchand Chellaram and the assessment year with which we are concerned is 1947-48, the relevant accounting year being the year ending 6th April, 1947. The original assessment of the assessee for this assessment year was completed long back, but it seems that some information was received by the Income-tax Officer that a sum of Rs. 1,07,350/- was remitted by the assessee from Madras by two telegraphic transfers through the Punjab National Bank Limited and the Income-tax Officer therefore addressed two letters dated 14th January, 1955 and 10th February, 1955 to the Manager of the Punjab National Bank Limited making inquiries about this remittance. Neither these two letters nor their copies appear to have been brought on record and it was common ground between the parties that they were at no time disclosed to the assessee and even now the copies of these two letters which ought to be in the record of the Income-tax Department have not been produced before us. The Manager of the Punjab National Bank Limited replied to the inquiries made by the Income-tax Officer by his letter dated 18th February, 1955 in which he stated: "one telegraphic transfer of Rupees 1,07,350/- sent by M/s. Kishinchand Chellaram from Madras was received by us on 16-10-46. I.-T. receipt was issued by us on the same day in favour of one Mr. Nathirmal and paid in cash on the same day." Though this letter of the Manager of the Punjab National Bank Limited was on the record of the Income-tax Officer, he did not disclose it to the assessee nor did he make any reference to it in the letters dated 24th February, 1955 and 4th March, 1955 which he addressed to the assessee making inquiries about the remittance of Rs. 1,07,350/- said to have been made by the assessee from Madras to Nathirmal in Bombay. These two letters addressed by the Income-tax Officer also make inquiries in regard to various other matters besides the remittance of Rs. 1,07,350/- and the assessee replied to these inquiries by its letter dated 24th March, 1955 in which amongst other things it pointed out that it was not able to trace any entry in its Madras books in regard to this remittance of Rs. 1,07,350/- indicating clearly that no such remittance was sent by it from Madras to Nathirmal in Bombay. There was no further communication from the Income-tax Officer to the asessee until 2nd February, 1956 when the Income-tax Officer once again addressed a letter to the assessee reiterating that one telegraphic transfer of Rs. 1,07,350/- was sent by the assessee from Madras on 16th October, 1946 in favour of Punjab National Bank Limited, Kalba Devi Road, Bombay and this amount was paid to one Nathirmal in cash on the same day and requesting the assessee to explain the nature of this transaction and to produce the relevant proofs of having accounted for this amount in its books of account. The assessee reiterated by its reply dated 9th February, 1956 that it had once again looked into its books of account but did not find any entry in regard to the remittance of Rupees 1,07,350/- and in the absence of such entry, it was not in a position to say anything further in the matter. Then again there was a lull in the correspondence for a period of about one year and on 4th March, 1957, the Income-tax Officer once again addressed a letter to the assessee repeating its request to explain the nature of the remittance of Rupees 1,07,350/- and to produce relevant books of account and complaining that the assessee did not seem to have given any reply to his earlier letter dated 2nd February, 1956. This complaint was, of course, unjustified because the assessee h