Findings on bogus entries and hawala income were factual, so no referable question of law arose.

A finding that creditor entries were bogus and that the assessee had not earned income from arranging hawala entries was treated as a question of fact based on appreciation of evidence. Because that factual conclusion was neither shown to be perverse nor legally infirm, it did not give rise to a referable question of law under section 256(2) of the Income-tax Act, 1961. The application seeking a reference therefore failed and was summarily rejected.

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Issues: Whether the Tribunal's finding that the assessee did not earn income from arranging hawala or bogus credit entries gave rise to a referable question of law under section 256(2) of the Income-tax Act, 1961.

Analysis: The proposed question turned on whether the creditor entries were bogus and whether the assessee had earned income from arranging hawala entries. These were held to be questions of fact arising from appreciation of the evidence on record. The Tribunal's refusal to make a reference was based on factual findings and was not shown to be perverse or infirm. Since a conclusion resting on factual appraisal does not, by itself, generate a question of law, no reference was warranted.

Conclusion: The application under section 256(2) of the Income-tax Act, 1961 failed, as no referable question of law was made out.

Final Conclusion: The court declined to compel a reference and summarily rejected the application.

Ratio Decidendi: A finding based on appreciation of evidence on matters such as genuineness of entries and earning of income from hawala transactions is a finding of fact and does not give rise to a referable question of law unless shown to be perverse.

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