The Income tax Officer had indented in support of his conclusion the surrounding circumstances, viz., that the appellant was one of the premier Arhatdars and grain merchants of Sahibgan1 with branches, doing similar business, at Nawgachia and Dhullian and all these places were very important business centres and Sahibganj, the principal place of business, had gained sufficient notoriety for smuggling foodgrains and other commodities to BenLal by country boats, and Dhulian which was just on the Bihar Bengal border was reported to be a great receiving centre for such commodities, that the foodgrains licence of the appellant at Nawgachia was also cancelled during the accounting year for not keeping proper stock accounts and the appellant was prosecuted under the Defence of India Rules but was given the benefit of doubt and was acquitted, that the accounting year and the year preceding it as also the year succeeding it were very favourable for the foodgrain dealers but the appellant though he had large capital in hand declared losses all through from 1944 45 assessment year up to 1946 47 assessment year, the loss according to its books in the year under consideration being to the tune of about Rs. 46,000, that the appellant was in very favourable circumstances in which there was a pos sibility of its earning a considerable amount in the year under consideration, that it also indulged in speculation (a loss of about Rs. 40,000 shown in Nawgachia branch (in Kalai account)), in which profit in a single transaction or in a chain of transactions could exceed the amounts involved in the high denomination notes, that even in the disclosed volume of business in the year under consideration in the Head Office and in branches there was possibility of its earning a considerable sum as against which showed a net loss of about Rs. 45,000 and that the appellant had all these probable source or sources from which the appellant could have earned the sum of Rs. 2,91,000 which was represented by the high denomination notes of Rs. 1,000 315 The Appellate Assistant Commissioner also emphasized the said aspect but based his conclusion mainly on the ground that the appellant had failed to prove that the high denomination notes had their origin in capital and not in profit and held that the Income tax Officer was justified in treating the sum of Rs 2,91,000 as secreted profits.