Reference under income-tax law refused where the proposed disallowance issue was already settled by Supreme Court precedent.

A reference under section 256(2) of the Income-tax Act was not warranted where the proposed question on disallowance under section 40(b) was already covered by the Supreme Court in Keshavji Ravji and Co. v. CIT. Because the Tribunal had followed that binding precedent, no live question of law remained for consideration. The application seeking a direction to state the case was therefore rejected.

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Issues: Whether a question should be directed to be referred under section 256(2) of the Income-tax Act, 1961 on the disallowance under section 40(b) of the Income-tax Act, 1961 where the point was already covered by the Supreme Court.

Analysis: The proposed question was found to be squarely covered by the Supreme Court decision in Keshavji Ravji and Co. v. CIT. Since the Tribunal's view was in conformity with that decision, the proposed reference did not raise any live question of law for consideration.

Conclusion: No referable question of law arose and the application for direction to state the case was rejected.

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