1The reference at the instance of the assessee under S.256(1) of the Income Tax Act, 1961 (the Act) is of the following question for the opinion of this court:
"Whether, on the .facts and in the circumstances of the case, the Tribunal was correct in holding that the amount of "gift of Rs. 75.000 could be treated as part of the accumulated profits available with the company at the time of winding up for the purpose of dividend within the meaning of S.2(22)(c) of the I.T. Act, 1961."

2 The assessee was the Managing Director of a private limited company by name Parkins (P) Limited which went into voluntary liquidation on December, 18, 1971. The general body of the company resolved on November 15, 1971 to make a gift of a sum of Rs. 75,000 to the daughter of the Managing Director. The amount was given and an amount of Rs. 7000 was also paid as gift tax. When the company went into voluntary liquidation subsequently, the assessee was appointed as the liquidator. He received an amount of Rs. 1677 as the balance of the accumulated profits left with the company. An amount of Rs. 1560 was also available with him as the balance in the development rebate reserve.

3 While completing the assessme