( 1 ) THIS reference under Section 66 (1) of the Indian Income-tax Act, 1922, relates to the assessment year 1960-61 in respect of which the previous year ended on June 30, 1959. In this reference the following question of law has been referred by the Tribunal for consideration of this court:"whether, on the facts and in the circumstances of the case, Section 23a of the Indian Income-tax Act, 1922, was rightly applied?"

( 2 ) THE relevant facts relating to this reference may briefly be stated. The assessee is a private limited company carrying on business of execution of contracts. For the assessment year 1960-61, the total income of the assessee, as revised by the Appellate Assistant Commissioner, was Rs. 63,436. The facts regarding the assessee's accounts and the assessments made on it as stated in the Tribunal's order in I. T. A. No. 14561 of 1963-64 (for assessment year 1957-58), which was followed and applied in I. T. A. No. 14564 of 1963-64 in relation to the assessment year 1960-61 may conveniently be stated at this stage. The assessee commenced business in January, 1956, and closed its books on June 30, 1956, and on the same date in the succeeding years. The