Law:

Section:

Section 256(2) of the income-tax act, 1961-Reference-Question of fact-Assessee filed return showing income from name-lending business but contended subsequently that some transactions in his books were genuine loan transactions-ITO rejected assessee's account books and completed assessment on the basis that assessee carried on only name-lending business-AAC and tribunal upheld ito's order-Whether any referable question of law arose from tribunal's finding that assessee was not carrying on any genuine money-lending business-Held, on facts, no Facts The assessee filed his returns for the assessment years 1963-64, 1964-65, 1966-67 and 1967-68 showing income from name-lending business which consisted of issuing fictitious loans on a commission. In other words, there was no genuine money-lending, but money was shown as lent in the books and commission was charged for that purpose. The ITO rejected the books of account produced before him and also rejected the evidence of some parties that some of the transactions shown in the assessee's books were genuine, and eventually assessed the assessee as if he was carrying on only the business of name-lending. In successive appeals, the AAC and the Tribunal upheld the ITO's order. The assessee filed four separate applications under section 256(1) in respect of all the four years asking for a reference on certain questions, but the Tribunal turned down the same by a consolidated order. On application under section 256(1), the assessee wanted a reference on the following three questions, viz., (i) whether the Tribunal was right in holding that the assessee was not engaged in genuine money-lending business ; (ii) whether there was any evidence before the Tribunal to hold that the assessee did not carry on any money-lending business ; and (iii) whether the Tribunal was legally correct in disregarding the solemn affirmation made by the assessee before the authorities and consequently holding that the assessee did not carry on any money-lending business. Held 1. The controversy as to whether some of the business of the assessee was name-lending and some of it was genuine was irrelevant. As soon as the assessee made a statement…

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