DIPAK KUMAR SEN, J.

( 1 ) THIS reference arises out of the income-tax assessment of Calcutta Credit Corporation, the assessee, in the assessment year 1966-67, the accounting year ending on June 30, 1965. In making the assessment, the Income-tax Officer found Rs. 1,20,000 standing credited in the name of one Shankarlal Dulichand in the books of the assessee. A sum of Rs. 10,846 was also shown as paid by way of interest to the said Shankarlal Dulichand. The Income-tax Officer did not accept the particular item of entry and treated the said sum of Rs. 1,20,000 as the assessee's income from other sources. He also disallowed the assessee's claim of deduction of Rs. 10,846 which was claimed to have been paid to Shankarlal Dulichand by way of interest. The taxable income of the assessee was computed accordingly.

( 2 ) BEING aggrieved, the assessee preferred an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner found that the creditor, Shankarlal Dulichand, was a registered firm consisting of five partners and that it was an assessee under the Income-tax Act. He also found from the report of the inspector dated July 26, 1969, that the firm had since

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