Banerjee, J. - (1.) Section 34 of the Indian Income-tax Act, 1922, which has been interpreted by the Supreme Court and by different High Courts in India in a number of cases, still remains a rich germinating ground for forensic arguments. One such argument confronts us in this reference.
(2.) The circumstances in which this reference has been made are hereinafter related in brief.
(3.) The assessee, Messrs. Kalyanji Mavji & Co., is a registered firm. The year of assessment, with which we are concerned in this reference, is 1956-57, corresponding to the accounting year being the Gujrati Diwali year 2011. The original assessment for the year in question was completed, on February 20, 1957, on a total income of Rs. 7,44,551, after having allowed deduction of a sum of Rs. 43,116 being interest paid by the assessee on borrowed money. This assessment was reduced by the Appellate Assistant Commissioner by a sum of Rs. 9,200, by his order dated July 3, 1958.;