Law:

Section:

Section 256(2) of the income-tax act, 1961-Reference-Question of fact-Tribunal found that assessee's declared profit rate was less if state of accounts of assessee in earlier years were taken into consideration and consequently additions to declared income were warranted under proviso to section 145(1)-whether any referable question arose out of tribunal's finding-Held, no Facts For the assessment year 1974-75, the ITO noted certain omissions and inconsistencies in the assessee's account books and by invoking the proviso to section 145(1), made certain additions to the returned income. The Tribunal eventually sustained the view taken by the ITO that proviso to section 145(1) was attracted to the assessee's case, on the basis of a specified finding that considering the state of accounts of the assessee in the past, the gross profit rate was low. The Tribunal also rejected the assessee's application for reference under section 256(1). On application under section 256(2): Held The Tribunal's finding was clearly one of facts which took into consideration the state of accounts of the assessee in the past and the gross profit rate shown by the assessee in the assessment year in question. In the circumstances, no referable question of law would arose from the Tribunal's order. Order SHUKLA, J.- This is an application under section 256(2) of the Income-tax Act, 1961 ('the Act'), seeking a direction to the Tribunal, Indore, for stating the case and referring it to this Court for deciding the following questions : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in applying proviso to section 145(1). 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the addition by estimating the G.P. rate and sales unwarranted by law." 2. The assessment year is 1974-75 for which the accounting year was year ending Diwali 1973. The assessee carries on the business of selling iron hoops and Bardana strips. For the assessment year in question he showed sales of Rs. 10,41,203 with a gross profit of Rs. 1,65,000. The ITO while framing the assessment noted certain omissions in the account books…

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