No referable question of law where book results were accepted and gross profit estimate lacked evidentiary basis.

No referable question of law arose where the Tribunal deleted additions after accepting the assessee's explanation and found no basis for rejecting the book results merely because profits were lower than in the earlier year. In the absence of a definite finding that the case fell within the first proviso to section 145(1), the Assessing Officer could not disregard the accounts, and there was no material to support an estimate of gross profit. On that record, a direction to make a reference under section 256(2) was not justified, and the petition was dismissed.

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Issues: Whether, on the facts found by the Income-tax Appellate Tribunal, any referable question of law arose so as to justify a direction under section 256(2) of the Income-tax Act, 1961.

Analysis: The Tribunal had deleted the additions after accepting the assessee's explanation and had recorded that, in the absence of a definite finding bringing the case within the first proviso to section 145(1), the Assessing Officer could not reject the book results merely because the profits were low compared with the earlier year. On that basis, the Tribunal held that no material existed to support an estimate of gross profit. The record therefore disclosed no arguable question of law requiring a reference.

Conclusion: No referable question of law arose from the Tribunal's order, and the petition seeking a direction for reference was rightly dismissed.

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