RATNAM J.

The assessee is the proprietor of a rice mill and has been carrying on the business of purchasing and selling paddy, rice and gunny bags. For the assessment year 1965-66, the assessee submitted a return on July 30, 1965, disclosing a total income of Rs. 44, 997 from his business. During the course of the assessment proceedings, the ITO noticed that the entries in the accounts of the assessee revealed that on December 16, 1964, five hundi loans of Rs. 20, 000 each had been advanced to the assessee by five bankers, Atmaram Rupchand, Nandlal Tikamdas, Shamlal Maheshlal, Gopaldas Sugnichand and Paramanand Kishindas and that a sum of Rs. 4, 050 has also been paid to them towards interest on these borrowings. Since the assessee did not furnish satisfactory proof of the genuineness of these hundi transactions which figured in his account books, the ITO treated the sum of Rs. 1, 00, 000 as income from undisclosed sources and computed the total income of the assessee at Rs. 1, 27, 000. On appeal by the assessee before the AAC, the assessment order was set aside with a direction that an opportunity should be given to the assessee to explain the hundi transactions. Subseq