Fact-based valuation and cash credit disputes under income-tax reference law did not raise a referable question of law.

Valuation of unrecorded parcels was treated as a factual determination based on the Tribunal's findings on weights, book entries, and purchase prices, so it did not give rise to a referable question of law under section 256(2) of the Income-tax Act, 1961. The addition of unexplained cash credits in partners' names was likewise held to turn on the sufficiency of the assessee-firm's explanation and the factual appreciation of the evidence, and no distinct legal issue emerged from the alternative contention that the addition could lie only in the partners' hands. The application to require a case to be stated was therefore declined.

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Issues: (i) Whether the valuation of the unrecorded parcels gave rise to any question of law warranting a reference under section 256(2) of the Income-tax Act, 1961. (ii) Whether the addition of unexplained cash credits in the names of the partners, treated as income of the assessee-firm, raised any referable question of law.

Issue (i): Whether the valuation of the unrecorded parcels gave rise to any question of law warranting a reference under section 256(2) of the Income-tax Act, 1961.

Analysis: The determination of the value of the unrecorded parcels depended on the facts found by the Tribunal, including the recorded weights and purchase prices of the parcels entered in the books. The Tribunal rejected the insured value as not reflecting the true value on the facts of the case, and the valuation issue was treated as one of fact rather than law.

Conclusion: No referable question of law arose on this issue.

Issue (ii): Whether the addition of unexplained cash credits in the names of the partners, treated as income of the assessee-firm, raised any referable question of law.

Analysis: The assessee-firm's explanation that the credits were introduced by the partners was not accepted, and the amounts were assessed as income from undisclosed sources. The Court held that the sufficiency of the explanation for the cash credits was again a question of fact, and the alternative contention that the addition could be made only in the hands of the partners was not available as a referable question in the application.

Conclusion: No referable question of law arose on this issue.

Final Conclusion: The application for requiring the Tribunal to state a case on the proposed questions was declined, as the controversy did not disclose any question of law fit for reference.

Ratio Decidendi: In proceedings for reference under section 256(2) of the Income-tax Act, 1961, issues turning only on factual appreciation, including valuation of stock and explanation of cash credits, do not furnish a question of law unless a distinct legal issue arises from the Tribunal's order.

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