(1.) This reference under Section 256(2) of the I.T. Act, 1961, arises out of income-tax assessment of Messrs. Prakash Textile Agency, the assessee, a registered firm, for the assessment year 1965-66, the relevant accounting year being Samvat year 2020-2021 Dewali.
(2.) The facts found and or admitted are shortly as under :
(3.) In the assessment for the said assessment year the ITO issued a summons under Section 131 of the Act on one Sureka Jute Co., from whom a loan of Rs. 1,00,000 was shown by the assessee. By a letter dated the 26th March, 1970, Sureka Jute Co. expressed its inability to produce the relevant books of account. The ITO, therefore, added the said sum as income of the assessee from undisclosed sources.