Reference jurisdiction limits questions to law arising from the Tribunal's order; factual findings and unrelated issues are not referable.

In reference proceedings, only a question of law arising from the Tribunal's order is referable; a pure finding of fact, or a question not arising from the order, cannot be compelled for reference. The Delhi HC held that the proposed issue on annual letting value disclosed a legal controversy and could be recast in proper form, so it was directed to be referred. The proposed issue based on application of an earlier year's decision was rejected because it did not strictly arise from the Tribunal's order. The issue on loss from sale of shares and allowance of long-term capital loss was also declined as it turned on appreciation of evidence and a factual finding.

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Issues: (i) whether the proposed question relating to annual letting value of the house property raised a referable question of law and could be reframed for reference; (ii) whether the proposed question based on application of earlier years' decision was required to be referred; (iii) whether the proposed question concerning the alleged loss on sale of shares and allowance of long-term capital loss gave rise to a referable question of law.

Issue (i): Whether the proposed question relating to annual letting value of the house property raised a referable question of law and could be reframed for reference.

Analysis: The wording of the proposed question was not satisfactory, but it disclosed a legal issue arising from the Tribunal's order. The Court exercised its inherent power to recast the question so that the precise legal controversy could be referred for opinion.

Conclusion: The question was reframed and directed to be referred.

Issue (ii): Whether the proposed question based on application of earlier years' decision was required to be referred.

Analysis: The Court held that this question did not strictly arise out of the Tribunal's order and therefore was not fit for reference under the reference jurisdiction.

Conclusion: The question was declined to be referred.

Issue (iii): Whether the proposed question concerning the alleged loss on sale of shares and allowance of long-term capital loss gave rise to a referable question of law.

Analysis: The issue turned on appreciation of evidence and the Tribunal's conclusion was treated as a pure finding of fact, not warranting reference as a question of law.

Conclusion: The question was declined to be referred.

Final Conclusion: The petition succeeded only to the extent of one reframed question being directed for reference, while the remaining proposed questions were rejected as not fit for reference.

Ratio Decidendi: In reference proceedings, only a question of law arising from the Tribunal's order is referable, and a pure finding of fact or a question not arising from the order cannot be compelled for reference.

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