SABYASACHI MUKHARJI, J.

( 1 ) THE assessment for the assessment year 1963-64 for income-tax was completed on August 31, 1965. In the said assessment, the assessee claimed deductions on account of payment of certain interest to various parties including, inter alia, the Murshidabad Jute Co. It appears that the account in the name of Murshidabad Jute Co. originated for the first time, according to the assessee, in the relevant financial year for the assessment year 1963-64 when credits aggregating to Rs. 90,000 figured on nine different dates. The said interest was allowed. Thereafter, there was assessment of the assessee for the assessment year 1964-65, which was completed on December 30, 1967. In the said assessment, the ITO examined the accounts and came to the conclusion that the transaction with Murshidabad Jute Co. was fictitious and for this purpose he relied on certain confessions alleged to have been made by one Sewlal Jain, who is the proprietor of the said Murshidabad Jute Co. The ITO, accordingly, disallowed the said interest. He recorded that what Sewlal Jain had done was to lend the name of Murshidabad Jute Co. to the assessee in order to accommodate the assessee to in

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