Judgement

B. P. JEEVAN REEDY, J.:- CIVIL APPEAL NO. 1562 OF 1977:

This is an appeal preferred by the assessee against the judgment and order of a Division Bench of the Calcutta High Court allowing the writ appeal preferred by the Revenue [Income Tax Officer, Central Circle-VI and others] against the judgment of a learned single Judge. The learned single Judge had allowed the writ petition filed by the assessee questioning the validity of a notice issued under Section 148 read with Section 147 of the Income-tax Act.

2. In the return filed for the Assessment Year 1959-60, the assessee had shown certain hundi loans totalling Rs.8,53,298/- said to have been taken from a number of persons. The Income Tax Officer accepted the averment and made the assessment. During the assessment proceedings for the succeeding year, 1960-61, the assessee again showed hundi loans in a sum of more than Rupees seventeen lakhs. The Income Tax Officer enquired into the truth of the averment and found that many of them were bogus claims while some of the alleged lenders were found to be near relations of directors or principal shareholders of the assessee. The Income Tax Officer held that out of the hundi l