Reference under section 66(1) requires a question of law arising from the Tribunal's order; pure facts are not referable.

A reference under section 66(1) of the Indian Income-tax Act, 1922 lies only on a question of law arising out of the Tribunal's order. The court held that whether coconuts grown in the assessee's own garden were converted into copra and retted husk by a process ordinarily used to render produce fit for market was essentially a factual matter and not a referable question of law. It also held that no question arose on the remand issue because the Tribunal had not pronounced upon it. The reference was declined on both questions.

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Issues: (i) Whether the conversion of coconuts grown on the assessee's own garden into copra and retted husk was exempt agricultural income under section 4(3)(viii) read with section 2(1)(b)(ii) of the Indian Income-tax Act, 1922. (ii) Whether any question of law arose for reference in relation to the remand orders when the Appellate Tribunal had not pronounced upon the matter.

Issue (i): Whether the conversion of coconuts grown on the assessee's own garden into copra and retted husk was exempt agricultural income under section 4(3)(viii) read with section 2(1)(b)(ii) of the Indian Income-tax Act, 1922.

Analysis: The exemption turned on whether the process employed was one ordinarily used by a cultivator to render the produce fit to be taken to market. The Tribunal had treated the assessee's activity as such a process, but the reference court held that the matter depended essentially on facts and was not a question of law arising from the appellate order. As the case was not one of absence of evidence, the court declined to convert the factual conclusion into a referable legal question under section 66(1).

Conclusion: The question was not answered.

Issue (ii): Whether any question of law arose for reference in relation to the remand orders when the Appellate Tribunal had not pronounced upon the matter.

Analysis: The Tribunal had expressly refrained from pronouncing on the remand issue. Since a reference under section 66(1) lies only on a question of law arising out of the Tribunal's order, and no finding had been recorded by the Tribunal on that issue, nothing referable arose for decision.

Conclusion: The question was not answered.

Final Conclusion: The reference was declined on both questions and no order as to costs was made.

Ratio Decidendi: A reference under section 66(1) of the Indian Income-tax Act, 1922 lies only on a question of law arising out of the Tribunal's order, and a pure question of fact or an issue not pronounced upon by the Tribunal is not referable.

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