Rectification of book profit computation was invalid where no apparent mistake existed and loss carry-forward issues had attained finality.

Rectification under section 154 could not be used to reduce credit for brought forward unabsorbed depreciation while computing book profit under section 115JB, because no apparent mistake from the record was shown and the assessee was not given proper opportunity. The original assessment had accepted the set-off on the figures available for unabsorbed business loss and depreciation, and the earlier order on carry forward of losses had already attained finality. The lesser amount of unabsorbed depreciation was treated as correctly deducted for book-profit computation, so the rectification order was held unsustainable and deleted.

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Issues: Whether the rectification made under section 154 of the Income-tax Act, 1961 by reducing the credit for brought forward unabsorbed depreciation while computing book profit under section 115JB was justified.

Analysis: The original assessment had accepted the assessee's claim of set-off based on the available figures of unabsorbed business loss and unabsorbed depreciation. The rectification was found to have been made without proper opportunity and without any mistake apparent from the record. The appellate authority also accepted that the lesser amount of unabsorbed depreciation was correctly deducted for computing book profit, and the earlier order relating to carry forward of losses had attained finality.

Conclusion: The rectification order under section 154 was not sustainable and was rightly deleted.

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