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Issues:
1. Allowance of surtax in the computation of the assessment under section 154 of the Income-tax Act, 1961. 2. Rejection of the claim for allowance of surtax liability in the computation of assessable income. Analysis: The High Court of Delhi was presented with a case involving the allowance of surtax in the computation of the assessment for the assessment years 1972-73 to 1974-75. The Income-tax Appellate Tribunal referred two questions to the court. The first question was whether the claim for allowance of surtax in the computation of the assessment could be made under section 154 of the Income-tax Act, 1961. The second question was whether the Tribunal was justified in rejecting the claim for surtax liability in the computation of assessable income. The Income-tax Officer had initially rejected the claim on the grounds that no mistake was apparent from the record and that section 40(a)(ii) of the Income-tax Act prohibited such deduction. The Commissioner of Income-tax (Appeals) and the Tribunal upheld this decision, citing the highly debatable nature of the issue and the precedent set by a Special Bench decision. The court referred to a previous judgment in a similar case where it was held that a claim for surtax allowance could not be made under section 154. Consequently, the first question was answered in favor of the Department, rendering the second question irrelevant. Overall, the judgment revolved around the interpretation of the Income-tax Act regarding the allowance of surtax in the computation of assessable income. The court relied on precedents and legal provisions to determine the validity of the claim made by the assessee. The decision highlighted the importance of consistency in interpreting tax laws and the significance of established legal principles in tax assessments.
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