Mixed question of law and fact in tax reference justifies revising poorly framed questions and remitting the case.

In a reference under section 66 of the Income-tax Act, the question whether an assessee was a dealer in investments and properties or a mere investor was a mixed question of law and fact, not a bare factual inquiry. The High Court was therefore not confined to asking whether there was material to support the Tribunal's finding. Because the original questions did not capture the real legal controversy, they were treated as inappropriate and were modified in the interests of justice. The matter was remitted for a fresh statement of case on correctly framed questions of law, without any determination of the merits of the tax liability.

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Issues: Whether the questions framed for reference were appropriate to the real controversy and whether the matter should be remitted for a fresh statement of case.

Analysis: The dispute turned on whether the assessee was a dealer in investments and properties or a mere investor, which required application of legal principles to the primary facts found by the Tribunal. A conclusion of this nature is a mixed question of law and fact, and in a reference under section 66 the High Court is not confined to a bare factual inquiry framed as whether there was material to support the finding. The questions originally framed did not correctly reflect the legal controversy, and it was proper in the interests of justice to modify them and require the Tribunal to state a fresh case on the correct questions of law.

Conclusion: The questions as originally framed were held to be inappropriate, and the matter was remitted for a fresh statement of case on the corrected questions.

Final Conclusion: The appeals succeeded to the extent that the High Court judgment was set aside and the reference was returned for fresh consideration on properly framed questions, without any decision on the merits of the assessee's tax liability.

Ratio Decidendi: In a reference under section 66 of the Income-tax Act, a tribunal's ultimate conclusion on whether transactions amount to trading or investment is reviewable as a mixed question of law and fact, and questions framed on the footing of a pure factual inquiry are liable to be modified so that the real legal controversy can be decided.

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