Rectification record can include connected assessment proceedings and later stock findings that reveal an apparent mistake.

For rectification under section 35 of the Indian Income-tax Act, 1922, the "record of the appeal" was treated broadly to include connected assessment proceedings and later orders that retrospectively displaced the factual basis of the appealed assessment. Because closing stock for one year formed the opening stock for the next, the later determination of the earlier year's stock valuation was relevant to identify an apparent mistake in the succeeding year's appellate order. Rectification was therefore permitted on the basis of the later superseding order, which was treated as part of the relevant record for that limited purpose.

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Issues: (i) Whether, for rectification under section 35 of the Indian Income-tax Act, 1922, the Appellate Assistant Commissioner could treat the record of the appeal as including related proceedings for the earlier assessment year and the Tribunal's later determination of closing stock. (ii) Whether a rectification under section 35 could validly be made by reference to a later order which superseded the earlier finding and thereby exposed the mistake in the appellate order.

Issue (i): Whether, for rectification under section 35 of the Indian Income-tax Act, 1922, the Appellate Assistant Commissioner could treat the record of the appeal as including related proceedings for the earlier assessment year and the Tribunal's later determination of closing stock.

Analysis: The expression "record of the appeal" was read broadly to include all material relevant to the assessment question under consideration, not merely the papers physically before the appellate authority on the date of hearing. Since the closing stock of one year became the opening stock of the next, the assessment records for the two years were interlinked. The later appellate finding on the closing stock for the earlier year replaced the Income-tax Officer's finding with retrospective effect and therefore became part of the relevant record for the succeeding year.

Conclusion: Yes. The later finding on the earlier year's stock valuation could be treated as part of the record of the appeal for rectification purposes.

Issue (ii): Whether a rectification under section 35 could validly be made by reference to a later order which superseded the earlier finding and thereby exposed the mistake in the appellate order.

Analysis: The rectification power extended to a mistake that became apparent when the later order supplanted the earlier factual basis underlying the appellate decision. The Court treated the subsequent order, though later in point of time, as forming part of the record for the limited purpose of identifying the apparent mistake. This was consistent with the principle that rectification may proceed where the true position is established by proceedings that are legally part of the assessment chain.

Conclusion: Yes. The rectification was within jurisdiction and was properly made under section 35.

Final Conclusion: The appellate rectification was upheld, and the assessee's challenge failed because the later stock finding could be relied upon to correct an apparent mistake in the opening stock for the subsequent assessment year.

Ratio Decidendi: For the purpose of rectification of an apparent mistake, the "record of the appeal" may include connected assessment proceedings and later orders that retrospectively supersede the factual basis of the appealed order, especially where successive assessment years are interdependent on the same valuation figure.

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