SUDHINDRA MOHAN GUHA, J.

( 1 ) THIS reference under Section 256 (2) of the I. T. Act, 1961, at the instance of the Commissioner of Income-tax, West Bengal-I, Calcutta, is in connection with the assessment years 1960-61, 1961-62 and 1962-63.

( 2 ) THE assessee was M/s. Bhuramal Manikchand, dealing in jute and cloth with head office at Calcutta and branches at Dhubri, Agartala and Alipurduar. In the course of assessment proceedings, the ITO noticed certain cash credits in the assessee's accounts and being not satisfied with the nature of sources of these cash credits, the relevant assessments were completed making additions of Rs. 1,22,500, Rs. 95,000 and Rs. 18,440 for those three years, respectively, as income from undisclosed sources. Penalty proceedings under Section 27i (1) (c), which were initiated by treating the aforesaid additions as items of concealed income by the ITO, were referred under Section 274 (2) to the IAC for disposal, In respect of the assessment year 1960-61 there were cash deposits of Rs. 7,000, Rs. 5,000, Rs, 10,000, Rs. 3,000, Rs. 1,000, Rs. 2,000 and Rs. 2,500 in the names of Deepchand Surana, Nouratmal Surana, Mahalchand Ghorawar, Promode Ranjan Ghose, B

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