Tribunal rules in favor of assessee, excludes partnership interest income to prevent double taxation for AY 2015-16.

The Tribunal allowed the appeal, ruling in favor of the assessee, and ordered the exclusion of interest income from partnership firms from the total income for AY 2015-16. The income had already been taxed for AY 2014-15, preventing double taxation. The Tribunal emphasized the AO's duty to assess correctly and rectify mistakes in income declaration, overturning the CIT(A)'s dismissal based on the non-revised return.

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Issues:
1. Taxation of interest income for AY 2015-16 already assessed in AY 2014-15.

Analysis:
The appeal addressed the issue of whether interest income of Rs. 23,57,248 from partnership firms, previously assessed for AY 2014-15, should be excluded from the total income of the assessee for AY 2015-16. The assessee contended that the income was mistakenly offered for taxation in AY 2015-16 and should not be taxed twice. The AO and CIT(A) rejected the claim due to the non-revision of the return of income by the assessee.

The assessee argued that since the income was already taxed for AY 2014-15 and not challenged, it should not be taxed again for AY 2015-16. Referring to legal precedents and a CBDT circular, the assessee asserted that the AO should correct the double taxation anomaly. The non-filing of a revised return was explained as the return was filed belatedly, preventing revision. The assessee emphasized the duty of the AO to assist taxpayers and assess correct income as per law.

The Revenue contended that the assessee did not rectify the return for filing a revised return, suggesting that the issue could be addressed under a specific section of the Act. The authorities below supported this argument.

The Tribunal found that the interest income in question belonged to AY 2014-15, not offered for taxation in that year but mistakenly included in AY 2015-16. The AO had added this income to the total for AY 2014-15, resulting in double taxation. The Tribunal emphasized the AO's duty to assess correctly and rectify any mistakes in income declaration. The CIT(A)'s dismissal based on the non-revised return was deemed incorrect, as the return for AY 2015-16 was filed before the assessment for AY 2014-15. The Tribunal held that the income, already taxed for AY 2014-15, should be excluded from AY 2015-16, directing the AO to assess the total income by excluding the said amount.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the assessee and ordering the exclusion of the interest income from partnership firms from the total income for AY 2015-16, as it was already taxed for AY 2014-15, thus preventing double taxation.

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