( 1 ) THIS reference under S. 256 (1) of the Income Tax Act, 1961, hereinafter called the Act, made at the instance of the Commr. LT. , Mysore, relates to the assessment year 1965-66. The question of law referred by the Income tax Appellate Tribunal, Bangalore Bench, is :" Whether, on the facets and circumstances of the case, the Tribunal was right in holding that the order of the Commr of IT. cannot be sustained?"

( 2 ) FOR the assessment year 1965-66, an assessment order was made by the ito on 8-6-1966, on a total income of Rs. 29,062 which included share of promts from various firms and also dividends and interest on securities. On 27-3-1965, in the year of account relevant TO the assessment year 1965- 66, the a,ssessee, had sold 4,735 partly paid 'b' class ordinary shares of Rs,10 each (Rs. 7-50 paid) of the Syndicate Bank Ltd. , Manipal, to Dr. T. M. A. Pai Benevolent Fund Trust at the cost price. The Commr. of IT issued under S. 263 of the Act 3 notice dt. 19-4-1968 requiring the assessee to show cause as to why the assessment order dt. 8-6-1966 should not be revised and the ITO asked to re-do the assessment by Assessing capital gains arising out of the sale of the shades by a

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