1. The question that arises on this reference is whether the assessee made any profit or gain by a transaction the effect of which was to transfer shares of 20 joint stock companies to a limited company called Homi Mehta and Sons Ltd. Sir Homi Mehta admittedly dealt in shares both ready and forward, and at the material date he, jointly with his sons, held shares in 26 companies including 20 companies with which we are concerned on this reference, and the cost price of these shares was Rs. 30,45,017/-.

The assessee "floated a private limited company with a capital of Rs. 60,00,000/-, and to this company he transferred several businesses in which he had a share and interest and also shares of 26 joint stock companies and the interest of Sir Homi Mehta in various businesses was valued at Rs. 23,08,281-11-0, the value of the shares of 26 joint stock companies was Rs. 40,97,000/- being their market value at the date of the transfer aggregating to Rs. 69,05,281-11-0.

It appears that Sir Homi Mehta had an overdraft account with a Bank and he had to pay to the Bank a sum of Rs. 9,05,281-11-0. The newly formed company agreed to take over this liability and discharge it, and, therefo