Unexplained cash credits under section 68 were treated as a pure question of fact, leaving no referable question of law.

Unexplained cash credits under section 68 depended on the Tribunal's appreciation of evidence as to the identity and capacity of the depositors. Where identity was proved but capacity was not, the addition was sustained; where both identity and capacity were proved, the deposits were accepted. On those findings, the question whether a cash credit was explained was a pure question of fact, and no arbitrariness or impossibility in the Tribunal's inferences was shown. No referable question of law arose, so the applications under section 256(2) were rightly rejected.

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Issues: Whether any referable question of law arose from the Tribunal's findings on unexplained cash credits under section 68 of the Income-tax Act, 1961, so as to justify applications under section 256(2) of the Income-tax Act, 1961.

Analysis: The additions sustained or deleted by the Tribunal turned entirely on appreciation of evidence regarding the identity and capacity of the depositors. Where the Tribunal maintained the addition, it recorded that identity was established but capacity to make the deposits was not proved. Where the Tribunal accepted the deposits, it found both identity and capacity proved on the material on record. The conclusion whether a cash credit stands explained under section 68 is, on such findings, a pure question of fact. No arbitrariness or impossibility in the Tribunal's inferences was shown.

Conclusion: No question of law arose. The applications under section 256(2) were rightly rejected.

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