Reference under section 256(1) refused where Tribunal findings were factual and no referable question of law arose.

The High Court declined to direct a reference under section 256(1) of the Income-tax Act, 1961 because the Tribunal's findings on the additions and the alleged breach of section 40A(3) were purely factual. Since no referable question of law emerged from those factual determinations, the petition was held not maintainable on merits and was dismissed. The principle applied is that a reference under section 256(1) is not warranted where the Tribunal's decision turns on findings of fact rather than on an arguable question of law.

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Issues: Whether any referable question of law arose from the Tribunal's findings so as to warrant a direction for reference under section 256(1) of the Income-tax Act, 1961.

Analysis: The Tribunal's conclusions on the additions and on the alleged violation of section 40A(3) were based on findings of fact. On that basis, no referable question of law was made out for opinion of the High Court.

Conclusion: No question of law arose for reference. The petition was not maintainable on merits and stood dismissed.

Ratio Decidendi: Where the Tribunal's determination rests on findings of fact, the High Court will not direct a reference under section 256(1) of the Income-tax Act, 1961 in the absence of a referable question of law.

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