Reference under Income-tax law requires facts found by Tribunal; no question of law arose on deductions claimed.

A reference under section 256(2) of the Income-tax Act, 1961 can be directed only on questions arising from facts admitted or found by the Tribunal. The High Court noted that the Revenue's challenge to deduction under sections 80HH and 80-I and to the assessee's status as an industrial company depended on factual matters not brought before, or recorded by, the Tribunal. Because a reference cannot be founded on facts outside the Tribunal's record, no referable question of law arose and the application was rejected.

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Issues: Whether a reference under section 256(2) of the Income-tax Act, 1961 could be directed on the basis of facts not found by the Tribunal, and whether any question of law arose from the Tribunal's order granting deduction under sections 80HH and 80-I.

Analysis: The application sought reference of questions concerning the assessee's entitlement to deduction under sections 80HH and 80-I and its treatment as an industrial company. The Court noted that the Revenue's challenge rested on factual circumstances which had not been brought to the notice of, or found by, the Tribunal. A reference under section 256 could be made only on the basis of facts admitted or found by the Tribunal, and the High Court could not be asked to decide a reference founded on facts outside the Tribunal's record.

Conclusion: No referable question of law arose from the Tribunal's order, and the application under section 256(2) was rejected.

Ratio Decidendi: A reference under section 256(2) of the Income-tax Act, 1961 lies only on questions arising from facts admitted or found by the Tribunal, and cannot be directed on the basis of facts not so found.

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