JUDGMENT :

R.C. MANKAD, J.

1. The Income-tax Appellate Tribunal (hereinafter referred to as the "Tribunal") has, at the instance of the assessee, referred to us for our opinion the following question under section 256(1)of the I.T. Act, 1961 (hereinafter referred to as the "Act") :

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was liable to pay tax in respect of capital gains on receipt of the amount equal to the face value of the preference shares of M/s. Universal Corporation Pvt. Ltd., on the company redeeming its preference shares ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee was liable to be taxed to capital gains arising on sale of the shares of Swastic Oil Mills Pvt. Ltd. by Anarkali Trust No. 1 whereby the assessee is a sole beneficiary for the year under reference ?

(3) If the answer to question No. 2 above is in the affirmative, whether the Tribunal was justified in law in holding that while making out the capital gains in respect of the said transaction relief under section 80T should not be allowed to determine capital