Rectification under section 154 cannot add debatable liabilities; only manifest record errors are correctable.

Rectification under section 154 is confined to mistakes apparent from the record and cannot be used where the alleged error requires argument, elucidation or competing views. In computing capital employed under rule 3, the distinction between debts owed and debts due was material, and balance-sheet figures were not automatically conclusive on deductible liabilities. The Income-tax Officer's addition of further liabilities required a debatable examination of whether those amounts had actually become due, so the adjustment was outside rectification jurisdiction and invalid.

---

---

Issues: Whether the rectification made by the Income-tax Officer by adding liabilities on his own motion could be sustained when the alleged error was not a mistake apparent from the record.

Analysis: Rectification under section 154 is permissible only where there is a mistake apparent from the record. A mistake that requires elucidation, argument, debate, or competing views is outside that jurisdiction. In computing capital employed under rule 3 of the relevant Rules, the distinction between debts owed and debts due was material, and the balance-sheet figures could not automatically be treated as conclusive for determining deductible liabilities. The additional liabilities introduced by the Income-tax Officer required a debatable examination of whether the amounts had actually become due and could not be characterised as an obvious or patent error on the record.

Conclusion: The rectification adding further liabilities was not permissible under section 154, as it did not relate to a mistake apparent from the record and was therefore invalid.

Ratio Decidendi: A rectification order cannot extend to issues requiring reasoning or debate, and a liability can be brought into rectification only if the error is manifest from the record itself.

---