COMMISSIONER OF INCOME-TAX Vs. S KANNAN

JUDGEMENT

(1.) This is a reference under section 256(1) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax, Karnataka-I, Bangalore, seeking our opinion on the following two questions :

(2.) A few introductory facts leading to this reference deserve to be noted at the outset.

(3.) The assessee is an individual. The relevant assessment year is 1980-81. The accounting year ended on March 31, 1980. The assessee is a director of Messrs. Escannon Auto Parts (P.) Ltd. In the books of the private limited company in the account of the director (hereinafter referred to as "assessee" for the sake of convenience) there were four credit entries dated January 9, 1980. They read as under :