Finding that business had not closed after nationalisation was factual, so no question of law arose for reference.

The Tribunal's finding that the assessee's business had not been closed, despite nationalisation of the kendu leaf trade, was treated as a finding of fact based on appreciation of evidence. Nationalisation did not necessarily compel the conclusion that the business had ended, and there was no legal bar to carrying on kendu leaf trade in some form. As the dispute turned on factual assessment rather than a legal principle, no question of law arose for reference under section 256(2) of the Income-tax Act, 1961, and the request for reference was rightly refused.

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Issues: Whether a question of law arose from the Tribunal's finding that the assessee's business had not been closed notwithstanding nationalisation of the kendu leaf trade, so as to justify a reference under section 256(2) of the Income-tax Act, 1961.

Analysis: The Tribunal's conclusion that the business had not been closed was reached on appreciation of evidence and therefore constituted a finding of fact. The circumstances of nationalisation did not compel an irresistible inference that the business had ended, and there was no legal prohibition against carrying on trade in kendu leaves in some form. On that footing, the controversy did not give rise to a question of law warranting reference.

Conclusion: No question of law arose from the Tribunal's order, and the request for reference was rightly refused.

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