Business expenditure deduction turned on factual findings, so no referable question of law arose under income-tax reference provisions.

Deductibility of disputed payments as business expenditure was treated as turning on factual questions, including whether there was any infraction of law, dishonest or fraudulent breach of contract, or a penalty character in the payments, and whether the outgoings were intimately connected with the business and incidental to it. Those matters were held to be pure questions of fact, not referable questions of law under section 256(1) of the Income-tax Act, 1961. The cited Supreme Court decisions were regarded as having settled the governing legal position on the kind of deduction claimed, so no further reference was necessary and the request to draw up a statement of the case was declined.

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Issues: Whether any referable question of law arose under section 256(1) of the Income-tax Act, 1961 from the assessee's claim that the sums in dispute were deductible as business expenditure.

Analysis: The disputed points concerned whether there had been infraction of law, dishonest or fraudulent breach of contract, whether the payments were in the nature of penalty, and whether they were intimately connected with the assessee's business and incidental to it. These matters were held to be pure questions of fact and not issues giving rise to a referable question of law. The cited Supreme Court decisions were treated as having finally settled the legal position on the kind of deduction claimed, making a reference unnecessary.

Conclusion: No referable question of law arose, and the request to draw up a statement of the case was declined.

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