Findings of fact and supported deduction claims held insufficient to raise a referable tax law question.

Weighted deduction for export-related commission was treated as a finding of fact based on the agency agreement and the nature of services rendered, so it did not raise a referable question of law. Relief under the research deduction provision was also upheld on the basis of the prescribed authority's certificate, even though the claim had not been made before the Assessing Officer, and this too was not considered a question requiring reference. The reference petition therefore failed because neither proposed issue justified a case being stated under section 256(2).

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Issues: (i) Whether the Tribunal's finding allowing weighted deduction under section 35B on commission payment raised a referable question of law under section 256(2) of the Income-tax Act, 1961. (ii) Whether the Tribunal's view that relief under section 35(2B) could be allowed on the basis of the prescribed authority's certificate, though not claimed before the Assessing Officer, gave rise to a referable question of law.

Issue (i): Whether the Tribunal's finding allowing weighted deduction under section 35B on commission payment raised a referable question of law under section 256(2) of the Income-tax Act, 1961.

Analysis: The Tribunal's conclusion rested on its appraisal of the agency agreement and the nature of the services rendered, namely that the services were connected with exports and were directed towards promoting sales. The finding was treated as one of fact, and the contractual clause permitting the agent to promote sale of goods supported the view that the expenditure related to export promotion within the agency arrangement.

Conclusion: The question was held not to give rise to a referable question of law.

Issue (ii): Whether the Tribunal's view that relief under section 35(2B) could be allowed on the basis of the prescribed authority's certificate, though not claimed before the Assessing Officer, gave rise to a referable question of law.

Analysis: The Tribunal had treated the claim as a permissible deduction supported by the certificate of the prescribed authority, even though it had not been raised at the assessment stage. No reason was found to disagree with that approach, and the issue was not regarded as requiring further reference.

Conclusion: The question was held not to give rise to a referable question of law.

Final Conclusion: The petition for reference failed because neither proposed question warranted a direction to state a case, and the matter was dismissed.

Ratio Decidendi: A question does not require reference under section 256(2) when it is concluded by findings of fact or when the Tribunal's allowance of relief rests on a permissible application of the governing statutory provisions and supporting material.

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