RAMANUJAM J.

The assessee in this case is firm called "Kishenlal Roopchand and company" its place of business being 27, Godown Street, Madras-1. It is engaged in cloth trade as also money-lending. The partners are Misrilal Lunia and Jayanthraj Lunia.

The assessee was originally assessed on a total income of Rs. 66, 209 for the assessment year 1951-52. Later, action under section 34(1)(a) of the Indian Income-tax Act, 1922, was taken on the basis that certain credit entries were found in the accounts of one Pattu Padmanabha Chetty in the name of Champalal Jayanthraj and Kishenlal Roopchand. Based on the credit entires the assessee's assessment was revised by adding Rs. 28, 211 to the income as originally assessed. The revised assessment was challenged in appeal before the Appellate Assistant Commissioner but without success. Thereafter, the assessee went in appeal to the Tribunal and the Tribunal sustained the addition to the extent of Rs. 10, 000 alone. At the instance of the assessee the following two questions have been referred to this court its opinion:

"(1) Whether, on the facts and circumstances of the case, the provisions of sectiom 34(1)(a) have been properly invoked ?" *

(2) Whether, on the facts and circumstance of the case, the decision of the Tribunal in confirming the treatment of the credit in the name of Kishenlal Roopchand as concealed income for the assessment year 1991-52 is based on materials ?

"The circumstances under which the revision of assessment under section 34(1)(a) came to be made the assessee's case may briefly be set out. In the course of asseessment proceedings one Pattu Padmanabha Chetty the Income-tax Officer noticed the following credit enteries :

Assessment Name in which Peak Interestyear credit appeared amount

1950-51 Champalal Jayanthraj 10, 000 1, 173.50

do. 17, 000 851.00

1951-52 Kishenlal Roopchand 10, 000 360.00

The Income-tax Officer examined the said Padmanabha Chetty on September 10, 1956, with reference to the said credit entries. The latter claimed that the three items of credit refered to above as well as those in the name of Misrilal and Jayanthraj were received from one and the same party by name Champalal, that Jayantraj had be en introduced to him by his friend Champalal and that the transactions were entered in his books in such names as were directed by Champalal. Thus, Padmanabha Chetty claimed that the the credits in favour of Jayanthraj and Kishenlal Roopchand were true and genuine and that, therefore, the amounts referred to above should be taken to be the amounts borrowed by him from the person concerned. But he was unable to produce any evidence in the form of receipts, etc., in support of his alleged borrowings from Jayantraj and Kishelal Roopchand. The Income-tax Officer was not inclined to accept the statement of Padamnabha Chetty that the credit entires represented his actual borrowings. He, therefore, proceeded to treat the credit entries as undisclosed income of Padmanbha Chetty and assessed him accordingly. His appeal to the Appellate Assistant Commissioner having failed he went before the Tribunal. The Tribunal deleted the additions made, observing as follows :" *

We were taken through the accounts entries in relation to Jayanthraj and also the evidence of Jayanthraj and of the assessee himself, Champalal was not examined. We are of the opinion that the amount represents genuine borrowing from Jayanthraj, a partner of Kishenlal Roopchand. It was not improbable that the amount was obtained through Champalal, the intermediary. There is evidence to show that Champalal acted as an intermediary between the assessee and his principals and that if he has instructed the assessee to show the credit in the name of Jayanthraj, the assessee had no other alternative.From the evidence it is clear that any document did not pass when these transactions took place. Therefore, the absence of any record of any document is not, in our opinion, fatal to the acceptance of the as