Question of law in gift-tax reference requires tribunal to state the case unless the issue is clearly settled or self-evident.

A question of law arises from a Tribunal order when the issue depends on the legal effect of the admitted facts and not on the Tribunal's view of its own correctness. In the context of introducing a capital asset into a partnership, the partnership deed and addendum may require interpretation of the Gift-tax Act to determine whether a reference is warranted. A reference may be refused only where the answer is self-evident or the issue is already conclusively settled. The Tribunal cannot decline to state the case merely because it regards the matter as academic or believes its decision is correct.

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Issues: Whether a question of law arose from the Tribunal's order so as to require a reference under section 26(3) of the Gift-tax Act, 1958, and whether the reference could be refused on the ground that the issue was already concluded or that the Tribunal's view was correct.

Analysis: The existence of a question of law depends on the nature of the issue emerging from the Tribunal's order and the admitted facts, not on whether the Tribunal considers its own decision to be correct. Where the controversy involves the legal effect of introducing a capital asset into a partnership, the terms of the partnership deed and the subsequent addendum may raise a legal issue requiring interpretation of section 2(xii) and section 4 of the Gift-tax Act, 1958. A reference may be declined only when the answer is truly self-evident or the question is already concluded so that the reference would be merely academic.

Conclusion: A question of law did arise from the Tribunal's order, and the Tribunal was not justified in refusing to state the case. The application for reference was therefore maintainable and was allowed in favour of the Revenue.

Ratio Decidendi: If a question of law arises from the Tribunal's order, the Tribunal must refer it for the High Court's opinion and cannot refuse reference merely because it believes its own decision is correct or because it considers the issue academic without clear legal finality.

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