Closing stock valuation is a factual estimate; no referable question of law arose where the Tribunal's finding was not perverse.

Valuation of closing stock depends on the nature of the asset and surrounding circumstances and cannot be determined by a rigid mathematical formula; it must be estimated reasonably on the facts before the authority. On the material considered, the Tribunal's finding on closing stock valuation was not shown to be perverse, and no defect in factual appreciation was established. As no referable question of law arose from that finding, the reference application under section 256(2) of the Income-tax Act, 1961 was dismissed.

---

---

Issues: Whether, on the facts and in the circumstances of the case, any question of law arose for reference concerning the Tribunal's finding on valuation of closing stock and whether that finding was perverse.

Analysis: The value of closing stock is a matter that may vary with the nature of the asset, place, and circumstances, and it cannot be mathematically determined. It must be estimated by the authority in a reasonable and judicial manner on the basis of the facts available. On the material before it, the Tribunal's finding on the valuation of closing stock was not shown to be perverse, and no defect in the factual appreciation was established so as to give rise to a referable question of law.

Conclusion: No question of law for reference was made out, and the reference application under section 256(2) of the Income-tax Act, 1961 was dismissed.

---