RAMASWAMI J.

The assessment of the assessee, a cine actor, for the assessment year 1960-61 was reopened under s. 147(a) of the I.T. Act, 1961. During the previous year ending December 31, 1959, relevant for the assessment year 1960-61, the assessee had shown as having raised the following hundi loans :

Rs.

1. From Dwarkadas Chaithram 20, 000

2. From Seth Jethanand Moolchand 20, 000

3. From Seth Paleraj Govindram 15, 000

The interest paid on these loans was Rs. 3, 484. The original assessment was completed on April 29, 1961, accepting the returns and treating the loans as genuine borrowings. On the ground that the ITO came to know that the borrowings from hundi bankers were not genuine, he reopened the assessment and assessed the entire loan amount of Rs. 55, 000 and interest of Rs. 3, 484 paid thereon as the income of the assessee from undisclosed sources. The assessee preferred an appeal to the AAC and contended that there was no material whatsoever on which the ITO could have come to the conclusion that the borrowings were not genuine. The AAC, after noting that the prevailing hundi racket at the relevant time gave a reasonable inference that some assessees were introducing