RAMANUJAM J.

The assessee, at whose instance both the above cases have been referred to this court, is a partner in two firms, Messrs. Nityakalyana Abarna Maligai and C. Innasi Muthu Mudaliar and Sons, Madurai. He also carried on money-lending and jewellery business in his individual capacity under the name and style of "Nityakalyani Stores" at No. 40, Sea Street, Colombo The premises of Nityakalyana Abarna Maligai, Madurai, was searched by the customs authorities in June, 1958, on suspicion that the assessee was engaged in currency smuggling activities. Certain papers found in the premises were seized by the said authorities but no action was taken against him by the said authorities thereafter based on those papers. The Income-tax Officer, however, pursued the matter with a view to find out whether the assessee in fact carried on business in currency smuggling. The assessee was examined on January 12, 1959, by the Income-tax Officer in this regard. He denied having engaged himself in currency smuggling activities. However, subsequently, he gave a letter on October 25, 1959, to the Income-tax Officer stating, inter alia, that with a view to purchase peace he was prepare