Unreliable accounts and best judgment estimation remain questions of fact when based on stock defects and record discrepancies.

Dissatisfaction with the correctness or completeness of accounts, rejection of books, and estimation of income on best judgment were treated as factual matters. The Tribunal relied on defects in the stock register and other discrepancies to support application of section 145(2), and the reference to comparable cases was used only to estimate the addition, not to invoke the provision. No material irregularity, reliance on irrelevant material, or omission of relevant material was shown. The findings were therefore findings of fact, and no question of law arose for reference; the reference application was rightly rejected.

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Issues: Whether the Tribunal's findings that the accounts were not correct or complete, that section 145(2) of the Income-tax Act, 1961 applied, and that the additions were to be estimated on the basis of past history and comparable results gave rise to any question of law.

Analysis: The Court held that dissatisfaction with the correctness or completeness of accounts, the decision to reject the books, and the estimation of income on best judgment are essentially factual determinations. The record showed defects in the stock register and other discrepancies, and the Tribunal relied on those defects to sustain the applicability of section 145(2). The later reference to comparable cases was used only for estimating the quantum of addition, not for invoking the provision. No material irregularity, reliance on irrelevant material, or omission of relevant material was established.

Conclusion: The Tribunal's findings were findings of fact, and no question of law arose for reference. The answer is against the assessee.

Final Conclusion: The reference application was rightly rejected because the disputed findings concerned factual appreciation of the accounts and did not justify a reference on a question of law.

Ratio Decidendi: Where the Tribunal's conclusion that accounts are unreliable is founded on specific defects in the books and stock records, and comparative results are used only for estimation of addition, the matter remains one of fact and does not raise a question of law unless irrelevant material was actually relied upon or relevant material was ignored.

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