Testamentary arrangement and taxability: no referable question of law arises when the Tribunal's finding is purely factual.

Where the Tribunal determined taxability by construing the will and the inherited rights on the facts, and held that the income attributable to the daughters was received by the assessee only in a representative capacity, no independent question of law arose under section 256(2) of the Income-tax Act, 1961. The Court treated the Revenue's proposed reference as turning on the Tribunal's factual finding rather than on any separate legal controversy, and therefore upheld rejection of the reference applications. The assessee's assessment position remained undisturbed because the testamentary arrangement was resolved as a matter of fact, not law.

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Issues: Whether the Tribunal's view that the assessee was taxable only on her own share and not on the shares attributable to the daughters under the will gave rise to a referable question of law under section 256(2) of the Income-tax Act, 1961.

Analysis: The dispute turned on the effect of the will and the factual conclusion drawn by the Tribunal that the income attributable to the daughters was received by the assessee only as a representative arrangement under the testamentary disposition, and that the shares were to be excluded from her assessable income. The Court accepted that the Tribunal had decided the matter on the factual matrix of the will and the inherited rights, and that the Revenue's proposed question did not involve any separate legal controversy.

Conclusion: No referable question of law arose and the Revenue's applications under section 256(2) were rightly rejected.

Final Conclusion: The determination of the assessee's taxability was left undisturbed because the Tribunal's finding was treated as one of fact, not law.

Ratio Decidendi: Where the Tribunal decides the tax consequence of a testamentary arrangement on the facts of the case, and no independent legal issue survives, no question of law is referable under section 256(2) of the Income-tax Act, 1961.

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