Tribunal Rules Against Double Taxation, Rejects Rectification for Prior Income

The Tribunal allowed the appeal, ruling that the prior year income had already been taxed in a previous assessment year and should not be subject to double taxation. The Tribunal considered the issue settled and debatable, determining that rectification u/s.154 was not appropriate for resolving contentious matters.

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Issues:
Appeal against CIT(A) confirming AO's rectification u/s.154 adding prior years income as book profit u/s.115JB.

Issue 1: Rectification u/s.154 adding prior years income as book profit u/s.115JB

The AO rectified the assessment order for the assessment year 2011-12, adding Rs.99.31 lakhs as prior year income not taxed u/s.115JB of the Act. The CIT(A) upheld the AO's action, stating that the prior year income shown in the appropriation account is not eligible for computing Book Profit u/s 115JB. The CIT(A) distinguished the case from precedents cited by the appellant, emphasizing that the AO did not interfere with the Profit & Loss account for the relevant previous year. The Tribunal noted the appellant's argument that the income had already been offered in assessment year 2007-08 and should not be subject to double taxation. The Tribunal found that the income had indeed been offered in 2007-08 and was adjusted in the books for the relevant year 2009-10. As the issue was settled and debatable, the Tribunal allowed the appeal, stating that rectification u/s.154 was not appropriate for such a contentious matter.

Conclusion:
The Tribunal allowed the appeal, emphasizing that the prior year income had already been offered in a previous assessment year and should not be subject to double taxation. The Tribunal found the issue to be settled and debatable, concluding that rectification u/s.154 was not suitable for resolving such contentious matters.

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