Judgment :- ISMAIL J. The assessee in this case was a shareholder of the Bank of Chettinad Ltd., which went into liquidation on January 29, 1965. She held 1, 510 shares in the said company at the time when the company went into liquidation. As a first instalment, the liquidator of the company paid the assessee in March, 1965, Rs. 200 each in respect of her entire shareholdings of 1, 510 shares, viz., Rs. 3, 02, 000. Deducting the sum of Rs. 1, 56, 000 being the original cost, the balance of Rs. 1, 46, 000 was offered for assessment as "capital gains" in the previous year for 1965-66 assessment. Consequently, at the beginning of the year of account relevant for assessment year 1966-67 the cost price of Rs. 300 each for 50 shares was outstanding pending adjustment. During the year of account relevant to assessment year 1966-67, now under consideration, the liquidation proceedings were completed and the assessee was allotted 746 shares of Rs. 1, 000 each in M/s. Chettinad Company Private Ltd., Pudukkottai, by the liquidator of the Bank of Chettinad Ltd. The distribution of the shares in M/s. Chettinad Company Private Ltd., Pudukkottai, was in proportion to the shares held by each of the shareholders in the Bank of Chettinad Ltd. In the return of income-tax filed for the assessment year 1966-67, the assessee declared in section 'F' that she was allotted 746 shares in Chettinad Company Private Ltd. in lieu of her holdings in the Bank of Chettinad Ltd. which went into liquidation. The Income-tax Officer held that under the provisions of section 46(2) of the Income-tax Act, the assessee was chargeable to capital gains tax in respect of the receipt of 746 shares in M/s. Chettinad Company Private Ltd. He accordingly determined the market value of the shares of M/s. Chettinad Company Private Ltd. and computed the capital gains assessable to tax at Rs. 4, 11, 800. On appeal preferred by the assessee the Appellate Assistant Commissioner confirmed the assessment made by the Income-tax Officer. But the Appellate Assistant Commissioner directed the Income-tax Officer to verify what were alleged to be arithmetical mistakes in the calculation of the market value of the shares and include in the total income only the correct amount. Aggrieved by the order of the Appellate Assistant Commissioner, the assessee preferred an appeal to the Tribunal. But the Appellate Assistant Commissioner directed the Income-tax Officer to verify what were alleged to be arithmetical mistakes in the calculation of the market value of the shares and include in the total income only the correct amount. Aggrieved by the order of the Appellate Assistant Commissioner, the assessee preferred an appeal to the Tribunal. The Tribunal allowed the assessee's appeal holding that a charge was not created by the provisions of section 46(2) and that, therefore, there was no justification in including in the taxable income of the assessee by way of capital gains any sum referable to the receipt from the liquidator of the Bank of Chettinad Ltd. for the assessment year 1966-67. It is the correctness of this order of the Tribunal that is challenged in the form of the present reference in which the following question has been referred to this court for its opinion under section 256(1) of the Income-tax Act, 1961 "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that any sum received by the assessee from the liquidator of the Bank of Chettinad Ltd. in the form of shares in M/s. Chettinad Company Private Ltd. in the year of account relevant to the assessment year 1966-67, cannot be included in the chargeable income of the assessee under the head 'capital gains' ?" * ending this reference on the file of this court the Supreme Court has rendered a decision on November 26, 1976, in Civil Appeal No. 51 of 1972 (Commissioner of Income-tax v. R. M. Amin. Both sides relied on this judgment as supporting their respective contentions. In the decision referred to above the question which the Supreme Court considered was "whether, on the facts and in the circumstances of the case, there was a transfer of a capital asset within the meaning of section 45 read with section 2(47) of the Income-tax Act, 1961?" * In that case, the assessee held shares in Kawelengoji Ginneries Ltd., Kampala, a private limited company incorporated in Uganda. The judgment of the Supreme Court points out that in that case both sides agreed that such a company was not a company within the meaning of the word "company" as defined in section 2(17) of the Income-tax Act. The judgment of the Supreme Court points out that in that case both sides agreed that such a company was not a company within the meaning of the word "company" as defined in section 2(17) of the Income-tax Act. The second ground on which the Supreme Court held that the assessee was not liable to capital gains tax in respect of the amount in question was that though section 46(2) of the Income-tax Act, 1961.