Pure finding of fact barred reference on commission and specimen expenses; no referable question of law arose.

Expenditure on commission and specimen copies was found to have been actually incurred, and the dispute concerned only the quantum that could be allowed as reasonable deduction. The departmental authorities accepted that such expenditure was allowable within reasonable limits, and the Tribunal, on appreciation of the evidence, treated the full amount claimed as reasonable. On that basis, the High Court regarded the finding as purely factual and held that no referable question of law arose under section 256(2) of the Income-tax Act, 1961. The challenge to the deletion of the additions and the view on penalty initiation under section 271(1)(c) therefore did not justify a reference.

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Issues: Whether any referable question of law arose from the Tribunal's findings deleting the additions relating to commission and specimen expenses and upholding the view that initiation of penalty proceedings under section 271(1)(c) was not justified.

Analysis: The expenditure under the heads of commission and specimen copies was found to have been actually incurred, with the real dispute confined to the quantum of allowance. The departmental authorities themselves had accepted that such expenditure was allowable within reasonable limits, and the Tribunal, on appreciation of the evidence, held the entire amount claimed to be reasonable. The Court held that this was a pure finding of fact. In such circumstances, no question of law could be said to arise for reference under section 256(2) of the Income-tax Act, 1961.

Conclusion: No referable question of law arose; the request for reference was rejected and the petitions failed.

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