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Issues:
1. Rectification of surtax assessment under section 13 of the Companies (Profits) Surtax Act, 1964. 2. Determining whether a sum in the balance sheet is a reserve or a provision. Analysis: 1. The case involved the rectification of a surtax assessment under section 13 of the Companies (Profits) Surtax Act, 1964. The Assessing Officer initially completed the assessment considering a sum as a reserve for computing the net chargeable profit. Subsequently, a notice was issued under section 13 to rectify the assessment, claiming the sum was a provision, not a reserve. The Commissioner (Appeals) canceled the rectification order, citing the complexity of determining whether the sum was a reserve or a provision, relying on legal precedents. The Tribunal upheld the cancellation, emphasizing that without an obvious mistake in the original assessment, rectification under section 13 was not warranted. 2. The second issue revolved around determining whether a sum in the balance sheet was a reserve or a provision. The departmental representative argued that the amount transferred to a 'reserve against export obligation' was a provision based on the company's export loss history. However, the assessee's counsel contended that the Tribunal had previously ruled in favor of treating the sum as a reserve, not a provision, for the same company in earlier assessment years. The Tribunal agreed with the assessee, highlighting the complexity of distinguishing between reserves and provisions, emphasizing the need for a detailed analysis considering various factors and legal interpretations. The Tribunal dismissed the department's appeal, affirming the Commissioner (Appeals)'s decision to cancel the rectification order under section 13.
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