THANIKKACHALAM J.

Pursuant to the order dated November 8, 1978, passed by this court in T. C. P. Nos. 160 to 165 of 1978, the Income-tax Appellate Tribunal, Madras, has referred the following three questions of law for our consideration

"1. Whether, on the facts and in the circumstances of the case and having regard to the provisions of clause 5 of the articles of association and the provisions of section 2(18)(b)(B)(ii) of the Income-tax Act, 1961, the Appellate Tribunal was right in holding that the company should be treated as one in which the public are substantially interested ?

2. Whether the Appellate Tribunal's finding that the shares of the assessee-company are capable of possessing the character of the transferability under sub-clause (n) of clause 5 of the articles of association and, therefore, the shares are freely transferable is sustainable in law and is a reasonable view to take on the facts of the case ?

3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that all the shares of the company need not possess the character of transferability in order to fulfil the provisions of section 2(18)(b)(B)(ii) ?"*