- (1.)THIS is an application under Section 256(2) of the Income-tax Act, 1961, for calling for a reference from the Income-tax Appellate Tribunal for resolution of the following questions said to be of law, arising out of the Tribunal's order dated March 17, 1993, in I. T. A. No. 252/Ind of 1991 and C. O. No. 56/Ind of 1991 :
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in allowing the claim of bad debt amounting to Rs. 44,38,276 ?

Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that there was no collusive agreement between the assessee-firm and the debtor company ?"

(2.)THIS application has arisen on account of a finding recorded by the Tribunal below that the transaction in question was a debt which has become irrecoverable. The Tribunal in para. 11 of its judgment clearly held :
"It is obvious from the facts narrated above that the transaction was not in the nature of investment. The agreement itself mentions that the debtor company had taken a loan from the assessee." It is further noted by the Tribunal that the interest accrued out of the said loan was added in the previous year as part of the income of the assessee. It is, thus, seen that the aforesaid finding of the Tribunal is purely a finding of fact as to the admissibility of the claim of bad debt. No question of law, therefore, arises in the matter requiring determination by this court.

Accordingly, we decline the Department's prayer for calling for a reference and dismiss the application.