JUDGMENT

Dr. ANAND, J.:—This appeal, on a certificate of fitness granted by the High Court under Art. 133 of the Constitution of India is directed against the judgment in Civil Misc. Writ Petition No. 1541 of 1974 decided by the Allahabad High Court on 24-11-1976 : (reported in 1977 Cur Tax Rep 73) and arises in the following circumstances :

The appellant is a firm which was assessed to income-tax at Azamgarh (U.P.). In the Income-tax Returns for the assessment year 1963-64, the assessee claimed that it had borrowed a sum of Rs. 50,000/- from M/s. Jain Finance Distributor (India) Private Limited, Calcutta (hereinafter called the Calcutta company) on 19-5-1962. An entry dated 25-5-1962 in that behalf was made by the assessee in its books of account as well as in the balance sheet as liability. The loan was stated to have been raised in cash and it was also claimed to have been returned in cash in 1968, though the interest on loan was stated to be paid by cheque/bank drafts till repayment in 1968. During the assessment proceedings, the Income-tax Officer directed the assessee to file a copy of the account of the Calcutta company to support the loan transaction. The assessee produced a