Tribunal findings of fact do not justify a reference where no substantial question of law arises.

Pure findings of fact by the Tribunal do not justify a reference under section 256(2) of the Income-tax Act, 1961 unless a referable question of law emerges. Here, the requested reference concerned deletion of additions relating to unexplained goods sold, unexplained closing stock, and unexplained cash credits, together with an allegation that the Tribunal's order was perverse. The High Court held that the Tribunal had appreciated the material on record and recorded factual conclusions, so no substantial question of law arose. The refusal to direct a reference was therefore upheld and the application dismissed.

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Issues: Whether the Tribunal's refusal to refer the proposed questions of law under section 256(2) was justified on the ground that the Tribunal's findings were pure findings of fact and did not give rise to any question of law.

Analysis: The application sought a direction to the Tribunal to refer questions relating to deletion of additions on account of unexplained goods sold, unexplained closing stock, and unexplained cash credits, along with an allegation that the Tribunal's order was perverse. The Court held that the Tribunal had recorded findings on factual appreciation of the material and that no referable question of law arose from those findings.

Conclusion: The refusal to direct a reference was upheld and the application was dismissed.

Final Conclusion: The order affirms that purely factual findings of the Tribunal, absent any demonstrable question of law, do not warrant a reference under section 256(2) of the Income-tax Act, 1961.

Ratio Decidendi: A reference cannot be directed under section 256(2) of the Income-tax Act, 1961 where the Tribunal's determination rests on findings of fact and no substantial question of law arises.

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