Rectification cannot rest on a debatable point where the issue is already covered by an existing reference.

A debatable issue, or one substantially covered by an existing reference, does not amount to a mistake apparent from the record for rectification purposes. In the context of deduction under section 80J and rule 19A, the Bombay HC held that the later Supreme Court decision in Lohia Machines Ltd. did not automatically justify fresh reference questions, especially where the pre-31 March 1971 position had not been considered and the effect on the relevant assessment years remained arguable. The Court therefore refused to enlarge the reference and held that no separate referral on the proposed additional questions was warranted.

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Issues: Whether the Department could seek reference of additional questions concerning the computation of deduction under section 80J and the applicability of rule 19A after the Tribunal had declined rectification on the basis that the point was covered by the existing reference.

Analysis: The controversy turned on whether the Tribunal's appellate order suffered from a mistake apparent from the record in light of the later Supreme Court decision in Lohia Machines Ltd. The Court noted that the Supreme Court had not considered the pre-31 March 1971 position and that the effect of the decision on the assessment years in question was itself debatable. Since the real dispute between the Department and the assessee was already covered by the question earlier referred, no separate reference was warranted on the proposed additional questions.

Conclusion: The proposed further questions of law were held not to be referable. The notice of motion was dismissed, in favour of the assessee.

Final Conclusion: The Court refused to enlarge the reference, holding that the rectification issue did not justify fresh questions of law because the matter was debatable and substantially covered by the question already referred.

Ratio Decidendi: A question that is debatable, or that is substantially covered by an existing reference, does not constitute a mistake apparent from the record so as to justify rectification or a further reference.

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