Genuineness of alleged scrap seller found to be a factual issue, leaving no referable question of law.

The reference application under section 256(2) of the Income-tax Act, 1961 failed because the dispute about the alleged scrap seller's genuineness was one of evidence, not law. The record showed that the assessee had adequate to prove the party's existence, the Income-tax Officer's report indicated that no such concern existed, and the assessee produced no material to displace that finding. The Tribunal's view therefore rested on appreciation of facts and did not disclose any referable question of law.

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Issues: Whether any question of law arose from the Tribunal's order so as to warrant a reference under section 256(2) of the Income-tax Act, 1961, in relation to the genuineness of the alleged scrap seller and the resulting addition to income.

Analysis: The controversy was confined to whether the alleged seller of scrap was a genuine party. The record showed that the assessee had been given ample opportunity to establish the existence of the party, that the Income-tax Officer's report indicated that no such concern existed, and that the assessee failed to produce material contradicting that report. On these facts, the Tribunal's conclusion turned on appreciation of evidence and did not give rise to any referable question of law.

Conclusion: No question of law arose for reference under section 256(2) of the Income-tax Act, 1961, and the application was dismissed.

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