JUDGMENT - Chagla, C.J.

[2] This reference arises a very interesting and important question as to the validity of act XXII [22] of 1947.

[3] The assessees before us are Sir Jamshedji Duggan and Lady Duggan, and the question arises with regard to a certain sum of Rs. 2,40,863 included in Sir Jamshedjis return of income for the assessment year 1947-48. This sum is the profit which Sir Jamshedji made as a result of the sale of certain shares and securities. Lady Duggan likewise, in her return of income for the same assessment year, included as capital gains two sums of Rs. 3,54,168 and Rs. 37,632 arising from the sale of shares and securities. The Income-tax Officer included these capital gains in the assessable incomes of the husband and wife under Section 12B, Income-tax Act. The contention raised by the assessees was that Section 12B, Income tax Act, was ultra vires of the Central Legislature. This contention was overruled by the Tribunal, and the assessees have now come before us on a reference made to us under Section 66 (1), Income-tax Act.

[4] Certain important amendments were effected in the Income tax Act by Act XXII [22] of 1947. A new definition of "capital asset" was inserted

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