( 1 ) THE petitioner, Shiva Lal, was at all material times until the time hereinafter mentioned, the owner of several manganese ore mines and kyanite ore mines in Orissa and Bihar.

( 2 ) ON April 1, 1960, a company known as S. Lal and Co. (Private) Ltd. was incorporated under the Indian Companies Act. The shareholders of the said company were the petitioner, Shiva Lal, and his wife, Smt. Chandrakala Lal, each having 50% of the total shares.

( 3 ) THEREAFTER, the said manganese ore mines and kyanite ore mines in Orissa and Bihar, of which the petitioner was the sole owner as aforesaid, were transferred to the said company for a total consideration of Rs. 29,91,133. After payment of certain amounts to the petitioner by cheque from the company in respect of the said consideration, on April 1, 1959, a sum of Rs, 24,86,633 was shown in the books of the company as a loan from the petitioner.

( 4 ) ON February 13, 1960, a date which is relevant for the assessment year 1960-61, Rs. 5,00,000 was paid by the company to the petitioner by the issue of 5,000 fully paid up equity shares of Rs. 100 each.

( 5 ) FOR the assessment year 1960-61, the regular assessment of the peti