1. The Income-tax Appellate Tribunal, Cochin Bench, has made this reference and the question referred is:

"Whether on the f acts and in the circumstances of the case, the proceedings initiated under S.147 (b) of the Income-tax Act, 1961 are legal and valid."

2. The reference relates to assessment year 1963 64, the relevant previous year being 1137 M.E. The original assessment was completed on 16 31964. Income-tax Officer subsequently reopened the assessment under S.147 (b) of the Incoce-tax Act, 1961 (hereinafter to be referred to as the Act) on the ground that the capital gains arising to the assessee on account of the transfer of a property bad not been brought to tax. Following facts are relevant in this connection.

3. A property by name Machungal Purayidom belonged originally to the assessee's wife Ratnamal. She died on 21 101954, leaving a will whereby the property was bequeathed to her 4 daughters, Nagammal, Maya Devi, Rajeswari and Visalakshi in equal shares. Nagammal and Maya Devi sold their interest in the property to the assessee on 3011958 for Rs. 10,000/-. Thus one-half of the entire property devolved on the assessee. He then sold this one-half interest in the