Law:

Section:

Section 256(2) of the income-tax act, 1961-Reference-Question of fact-ITO added unexplained cash credits as taxable income-Tribunal sustained addition by appraisal of entire evidence-Certain contentions not raised before tribunal-Whether could be raised in reference on matters decided as pure question of fact-Held, no Facts While making the assessment of assessee-firm for the assessment year 1968-69, the ITO included in its income a cash credit of Rs. 20,000 in the name of TL, as he was not satisfied with the assessee's explanation that TL brought this amount from G. The ITO's order was confirmed by the AAC and the Tribunal. The Tribunal declined to refer under section 256(1) in view of its conclusion that no question of law arose because its decision was based on appraisal of the entire evidence of record and was a pure question of fact. On reference under section 256(2), the assessee contended that, in deciding the appeal, the Tribunal considered the statement of G, which was inadmissible in evidence and that it did not consider certain material on record. Held 1. Unless the matters were raised before the Tribunal, these could not be raised before the Court. The Tribunal is the final court to decide the matters relating to the facts. After considering various circumstances, the Tribunal rejected the statement of TL after finding that G's statement was not worthy of credence. After rejecting both these statements, no question of law arose in this regard. 2. The Tribunal was, accordingly, right in declining to refer the question of law under section 256(1) as none arose out of its finding of fact. Judgment Rajendra Nath Mittal J.-This is a petition under section 256(2) of the Income-tax Act 1961 (hereinafter referred to as "the Act") praying that the Tribunal be directed to refer the following questions of law to this court: "Whether, on the facts and in the circumstances of the case, the find-ding of the Tribunal that Shri Gyan Chand had no sufficient funds to make the advance of the loan of Rs. 20,000 to Shri Tarsem Lal is vitiated by taking into consideration the inadmissible evidence of Shri Gujjar Mal and by not taking into consideration the material on…

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