A. Narayana Pai, J.—The assessee is a Hindu undivided family trading in cotton and other goods. Their accounting year is Deepavali to Deepavali. Their income for the accounting year May 20, 1946, to November 12, 1947, was assessed to tax under the Income Tax Act for the assessment year 1948-49. During the scrutiny of accounts, the officer discovered the following entries purporting to be loans received from one Raja Sathyamma :

Rs.

28-11-1946 10,000

23-12-1946 10,000

25-12-1946 10,000

06-01-1947 2,000

----------

Total : 32,000

----------

2. The officer refused to believes these entries as representing genuine loans. The explanations offered by the assessee were found by him to be unsatisfactory, with the result, he added the said sum to the income returned by the assessee.

3. Upon appeal by the assessee, the Appellate Assistant Commissioner agreed with the finding of the Income Tax Officer. He, however, pointed out that the proper categorisation of this sum should have been under the heading "income from undisclosed sources". He also thought that the displ