No substantial question of law arose where factual findings supported genuine transactions and deletion of penalty and demand.

The High Court held that no substantial question of law arose from the Tribunal's deletion of penalty and demand because the Tribunal's findings were factual and based on the record. It accepted that the assessee had maintained lot registers and ledger entries, made payments by account payee cheques, and that there was no material discrediting the transactions or proving the suppliers were non-existent. As the Tribunal was the final fact-finding authority and no legal error in its appreciation of evidence was shown, the Department's challenge lacked merit and could not justify interference.

---

---

Issues: Whether the Tribunal's decision setting aside the penalty and the demand raised against the assessee gave rise to any substantial question of law warranting interference in the Department's appeal.

Analysis: The Tribunal's conclusion rested on appreciation of the evidence regarding the alleged non-existent suppliers, the maintained lot register, ledger entries, payment by account payee cheques, and the absence of material to discredit the transactions. The High Court accepted these findings as factual findings based on the record. Since the Tribunal acted as the final fact-finding authority and the challenge did not disclose any legal error in those findings, no substantial question of law arose for consideration.

Conclusion: The Department's appeal was held to be devoid of merit and was dismissed.

---