By an order of this Court dated the i4th February, 1961, in Civil Rule No. 4 (M) of 1960, the Income-tax Appellate Tribunal was asked to refer the following two questions of law for deci­sion:

(1) Whether on the facts and in the circum­stances of the case any 'income' has escaped due to the failure of the assessee to disclose fully and truly all material facts and the proceedings started under Section 34 (i) of the Income-tax Act were justified and valid in law?

(2) Whether there was any material evidence or basis on record to support that the sum of Rs. 1,18,000/- was secretly invested in the business during the years 1942 to 1946 and the estimate of profits at Rs. 60,000/- was justified and if so whe­ther the entire sum of Rs. 60,000/- can be taxed during the year under consideration?

(2) The facts as disclosed in the statement of the case are that the Hindu undivided family styled 'Bhimraj Chouthmal' whose karta is Chouthmal Agarwalla, was assessed for the year 1946-47, the corresponding accounting year being 2002 R. N., as Hindu undivided family, for Rs. 29,761/-. Notice; under Section 34 was subsequently issued on the ground that by reason of non-disclosure of cer