Question of law for tax reference absent where Tribunal's refusal rested on factual appreciation and adverse evidentiary findings.

Factual findings that an assessee-legal practitioner could not have earned the low income disclosed, together with rejection of the returned income and an adverse inference from non-production of diaries, were treated as matters of appreciation of evidence. Because those findings did not disclose any question of law, no reference was required and no direction to the Tribunal under section 256(2) was warranted.

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Issues: Whether a direction under section 256(2) of the Income-tax Act, 1961 could be issued when the Tribunal's refusal to refer the proposed questions rested on appreciation of facts and did not give rise to a question of law.

Analysis: The Tribunal's view that the assessee, a legal practitioner, could not have earned the very low income disclosed, the rejection of the returned income, and the adverse inference from non-production of diaries were all founded on factual appreciation. Such findings did not disclose any legal question requiring reference.

Conclusion: No question of law arose for reference, and no direction to the Tribunal under section 256(2) was warranted.

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