SABYASACHI MUKHARJI, J.

( 1 ) IN this reference, we are concerned with the assessment year 1962-63 relevant to the financial year 1961-62. The assessee is an individual. During the relevant year, he sold 1,150 shares of Bharat Woollen Mills Ltd. to his brother, Sri P. N. Mehrotra, at the rate of Rs. 10 per share, for a sum of Rs. 11,500. The break-up value of those shares, on the basis of the balance-sheet, would have been Rs. 50,209 on the date of the transfer. The ITO was, therefore, of the opinion that the provisions of Section 52 (1) of the I. T. Act, 1961, were applicable. It was contended on behalf of the assessee that under Section 47 (iii) of the Act, a gift was not regarded as transfer of a capital asset and was not assessable to capital gains and the transaction was a deemed gift within the meaning of the definition of the G. T. Act, 1958, The ITO did not accept this contention. He, therefore, treated the difference of a sum of Rs. 46,126 in the value of those shares on the basis of the balance-sheet of the company and the price charged as capital gains, which amounted to Rs. 7,417 already declared by the assessee and included the remaining amount of Rs. 38,709 in the as

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