Judgment

HEGDE, J.: This appeal is by a certificate under section 66A (2) of the Indian Income Tax Act, 1922 (which will hereinafter be called by Act ) issued by the High Court of Calcutta. It arises out of the judgment and order of that High Court dated February 3, 1965 in a reference under section 66 (1) of the act. In the reference mentioned earlier, two question of law were referred to the High Court for its opinion. They are:

"(1) Whether on the facts and in the circumstances of the case the bonus shares of the face value of Rupees 50,07,500/- should be included in the paid up capital of the assessee within the meaning of that term in pursuance of sub-section (1) of the explanation to paragraph (D) of Part II of the Finance Act, 1956 for the relevant assessment year?

(2) Whether on the facts and in the circumstances of the case the bonus shares in question can be said to have been issued within the meaning of the second proviso to paragraph (D) of Part II of the Finance Act, 1956 to the shareholders by the assessee during the accounting year ended 31st December, 1955 relevant for the assessment year 1956-57?"

2. The facts relevant for the purpose of deciding this appeal may now be