9911796707
TMI Blog2001 (10) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt and the Tribunal has noticed that even facts admitted had not been taken into consideration. This needed examining various facts drawing inferences from some basic findings. In that view of the matter, the decision of the Supreme Court as aforesaid it was apparent that there did not exist any such mistake, which could be said to be a mistake apparent on the face of the record and could not be corrected by invoking the power under section 13 of the Act. We do not find any error in the order of the Tribunal, rejecting the application under section 256(1). - The application under section 256(2) is, therefore, rejected - - - - - Dated:- 10-10-2001 - Judge(s) : RAJESH BALIA., ARUN MADAN. JUDGMENT The judgment of the court was deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act of 1964. For the assessment year 1973-74 for computation of capital deployed for the purpose of ascertaining the liability of surtax, it claimed a sum of Rs. 5,50,000 on account of reserve for bad and doubtful debts and advances, as statutory deduction as reserve. The assessment was completed under section 143(3) of the Income-tax Act read with the provisions of the Act of 1964, by accepting the claim to the said deduction for computing the capital deployed during the previous year relevant to the assessment year 1973-74. The Inspecting Assistant Commissioner vide its order dated August 16, 1997, invoked section 13 of the Act of 1964 for withdrawal of the allowance of deduction as Rs. 5,55,000 in the computation of capital deploy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact necessary for deciding a question of law and its effect was not a mistake apparent from the record, the Inspecting Assistant Commissioner could not have resorted to his power to rectify the assessment order by invoking section 13 of the Act of 1964. The question as required to be referred to this court shows that the contours of enquiry is whether the alleged mistake found by the Inspecting Assistant Commissioner was a mistake apparent on the face of the record, which could be corrected by rectification. The principle is well settled by the decision of the Supreme Court since the decision in the case of T.S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50, that the conclusion cannot be said to be a mistake apparent on the face ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the gross receipts of profit and loss account, "reserve" is an appropriation of profit to provide for the asset which it represented. Reference in this connection may be made to CIT v. Pratap Cashew Co. (P.) Ltd. [1979] 116 ITR 733 (Ker). The question has been recently dealt with by the Supreme Court in State Bank of Patiala v. CIT [1996] 219 ITR 706, the court said: "The distinction between a provision and a reserve is, in commercial accountancy fairly well-known. Provisions made against anticipated losses and contingencies are charges against profits and, therefore, to be taken into account against gross receipts in the profit and loss account and the balance sheet. On the other hand, reserves are appropriations of profits, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and doubtful debts in these cases were 'reserves' qualifying for appropriate relief under rule 1(xi)(b) of the First Schedule and rule 1(iii) of the Second Schedule to the Act." In the present case also the Tribunal has found as a fact as noticed by us above that whether the sum was set apart to meet a liability which was well known on the date of the balance-sheet or was not so known itself was not free from doubt and the Tribunal has noticed that even facts admitted had not been taken into consideration. This needed examining various facts drawing inferences from some basic findings. In that view of the matter, the decision of the Supreme Court as aforesaid it was apparent that there did not exist any such mistake, which could be said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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