Taxable profit computation in an adventure in the nature of trade can raise a referable question of law.

Where the legality of deferring computation of taxable profit in an adventure in the nature of trade is challenged, the issue is a question of law and not merely one of fact. The Tribunal's view that profit from the sale of part of the land could not be ascertained until all the lands in the venture were sold made the legal method of profit computation directly relevant. The matter was therefore fit for reference to the High Court under the statutory reference provisions, and the Tribunal and High Court ought to have directed reference of the question or an appropriate question for opinion.

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Issues: Whether the question framed by the department raised a question of law requiring reference to the High Court.

Analysis: The Tribunal had held that the profit from the sale of a part of the land could not be ascertained until all the lands purchased in the venture were sold. The dispute was not confined to a mere finding of fact, because the legal permissibility of deferring computation of profits in an adventure in the nature of trade depended on the correct legal approach to assessment of profits from a part sale. The question was therefore fit to be referred for the opinion of the High Court.

Conclusion: The question did arise and the Tribunal and the High Court ought to have directed reference of the question, or an appropriate question, for opinion.

Ratio Decidendi: Where the legal validity of the method adopted for computing taxable profit in an adventure in the nature of trade is in issue, the matter raises a question of law requiring reference under the statutory reference provisions.

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