Double taxation barred where capital gain was already disclosed in the return, limiting addition to the differential amount.

Where long-term capital gain was already disclosed in the return of income, only the unexplained differential between that figure and the higher amount shown in the tax audit report could be brought to tax. Taxing the entire audit-report figure would result in double taxation of income already offered to tax. The addition was therefore sustained only to the extent of the mismatch, and the balance was deleted.

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Issues: Whether the entire amount of long-term capital gain reflected in the tax audit report could be added when the assessee had already disclosed capital gain in the return of income, and only the differential amount between the two figures survived for taxation.

Analysis: The assessee had shown long-term capital gain in the return of income, while the tax audit report reflected a higher figure. The discrepancy was limited to the difference between the two amounts. Since the same income already stood offered to tax in the return, taxing the entire figure from the audit report would amount to double taxation. The only permissible addition was the differential amount arising from the mismatch.

Conclusion: The addition was sustained only to the extent of the differential amount and deleted for the balance. The issue was decided partly in favour of the assessee.

Final Conclusion: The appeal was allowed in part, with relief granted by restricting the taxable addition to the difference between the amounts disclosed in the tax audit report and the return of income.

Ratio Decidendi: Where income has already been disclosed in the return, only the unexplained differential between the return and the audit report can be brought to tax, and the same income cannot be subjected to double taxation.

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