Dipak Kumar Sen, J. - (1.) The Gramophone Co. of India Ltd., the assessee, was assessed to Companies (Profits) Surtax Act, 1964, for the assessment years 1969-70 to 1972-73, the relevant accounting years ending on the 30th Jane of the calendar years 1968 to 1971. In the assessments for the assessment years 1969-70 and 1970-71, the Income-tax Officer allowed deduction under Section 80-O of the Income-tax Act, 1961, without proportionate deduction in the computation of the capital. In the said assessment years 1969-70 and 1970-71, the Income-tax Officer, in computing the capital of the assessee, allowed the inclusion of the reserve for doubtful debts and advances and for the said assessment year 1970-71, the Income-tax Officer also included an amount under the head "Tax equalisation reserve ".
(2.) The Commissioner of Income-tax, West Bengal III, by his letter dated 31st May/1st June, 1974, informed the assessee that he proposed to revise the assessments of surtax for the said assessment years 1969-70 and 1970-71 under Section 16 of the Surtax Act.
(3.) In its reply to the said letter of the Commissioner, dated June 26, 1974, the assessee requested the Commissioner to drop the proceedings under Section 16 and also made representations on merits supporting the assessments already made.;