COMMISSIONER OF INCOME TAX Vs. S C GHOSAL

JUDGEMENT

(1.) In this reference under Section 256(2) of the Income-tax Act, 1961, at the instance of the assessee, S. C. Ghosal, the following questions have been directed to be referred :

(2.) The assessment year involved is 1959-60, the relevant previous year being the calendar year 1958. The facts found and/or admitted are, inter alia, as follows: The assessee is an individual and at the relevant time carried on two separate businesses. The first business was in the name of "S. C. Ghosal" in which the assessee dealt in scrap iron. The second business was in the name of "Adhya Sakti Industrial Works". In this business the assessee manufactured items like ridges, pulleys, etc.

(3.) In the assessment for this assessment year the Income-tax Officer came across credit entries in the names of five creditors. The said creditors are (1) Ram Chandra Mohanlal, (2) Laxmichand Daulatram, (3) Seth Naraindas Hotchand, (4) Gopaldas Lalchand, and (5) Bhagwandas Purushottamdas,