K.S.Hegde, J.

(1) THIS is an appeal by special leave from the judgment of the High court of Kerala in Income-tax Referred Case No. 11 of 1967 on its file.

(2) THE facts of the case lie within a narrow compass. The assessee carried on business as tin fabricator and oil miller. For the previous year ending on 31/12/1959 he returned an income of Rs. 52,280.00. One Mohideen Kunju was managing the affairs of the assessee. The assessee had obtained key loans and overdrafts from the Ganara Bank Ltd. As per the Balance Sheet of the assessee as on 31/12/1959, the total amount due to the Canara Bank Ltd. was Rs. 2,78,015.72. According to the information supplied by the Canara Bank Ltd. in response to the enquiry made by the Income-tax Officer, the amount due to that Bank from the assessee was only Rs. 2,40,792.29 as on 31/12/1959. There was thus a difference of Rs. 31,858.78 P. The Income-tax Officer called upon the assessee to explain that discrepancy. The assessees representative was not able to reconcile the discrepancy and the assessee wrote to the Income Tax Officer on 11/03/1964 to the effect that Mohideen Kunju who was managing his affairs, was in charge of