Judgement

N. H. BHAGWATI J. : This appeal with special leave is directed against the order of the Income-tax Appellate Tribunal, Madras A" Bench dated 8-8-1952 made in I. T. A. No. 3254 of 1951-52 allowing the appeal and reversing the order of the A. A. C. in I. T. A. No. 130 of 1949-50 for the assessment year 1948-49 dated 23-6-1951 whereby the A. A. C. had allowed the appellant s claim for a reduction of his total income by Rs. 1,59,240.

2. The appellant is a cloth merchant dealing in cloth piece goods and yarn both on wholesale and retail basis at Madurai. The appellant and his brother Abdulla Salay Mohammed were originally carrying on the business in partnership. But the partnership was dissolved during the year 1947-48 and the appellant took over the entire business and became the sole proprietor thereof. For the assessment year 1948-49 (the accounting year being the year ending 31-3-1948) he submitted a return on 7-9-1948 in which he showed a net loss of Rs. 7,224 in his business under the head "business, profession or vocation."

3. In the course of the investigation the I.T.O. Madurai found two cash credits in the books of account produced by the appellant showing a sum of Rs