Rejection of books of account and estimated income addition found to raise no referable question of law.

Once the Tribunal rejected the assessee's books of account, the dispute over section 145 did not raise a referable question of law because section 145(2) applied in substance despite any reference to section 145(1). Challenges to the Tribunal's reliance on loose papers and its estimate of income were treated as factual matters, and the estimate was supported by material. No question of law arose under section 256(2), so reference was refused.

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Issues: Whether any referable question of law arose from the Tribunal's order rejecting the assessee's books of account and sustaining an estimated addition to income.

Analysis: The application sought reference of questions challenging the applicability of section 145 and the findings based on loose papers and estimate of income. The Court held that once the books of account are rejected, section 145(2) applies in substance and the mere reference to section 145(1) does not create a referable question of law. Questions attacking the Tribunal's appreciation of loose papers and the estimated addition of income were held to lie in the factual realm. The estimate sustained by the Tribunal was supported by material and therefore did not give rise to a question of law under section 256(2).

Conclusion: No referable question of law arose. The application for reference was rejected.

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