Rectification record can include assessment material, allowing correction of a stock valuation error revealed by later final findings.

Rectification under section 35 of the Indian Income-tax Act, 1922 could extend to a later assessment year where the opening stock had been carried forward from an earlier year and a subsequent final finding showed that the earlier closing stock basis was ? Need English. Let's craft proper. Rectification under section 35 of the Indian Income-tax Act, 1922 could extend to a later assessment year where the opening stock had been carried forward from an earlier year and a subsequent final finding showed that the earlier closing stock basis was incorrect. The record for rectification was held to include not only the appellate order but also the material and evidence forming the basis of the assessment. A mistake apparent from that record could therefore be corrected when the later determination exposed the error, and the rectification was upheld.

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Issues: Whether the Appellate Assistant Commissioner could rectify the assessment order for the later assessment year under section 35 of the Indian Income-tax Act, 1922 by taking into account the record and final finding relating to the closing stock in the earlier assessment year.

Analysis: The opening stock for the later year had been valued on the basis of the closing stock figure adopted in the earlier assessment proceedings. That figure, though originally accepted in the later year, was later shown to be incorrect when the Tribunal finally deleted the addition made in the earlier year and restored the assessee's book figure for closing stock. The record for purposes of rectification was held to include not merely the text of the appellate order, but the material and evidence on which the assessment for the same assessee was based. A subsequent final finding affecting the very basis of the later year's assessment could therefore be taken into account in rectification proceedings, because the mistake became apparent from the record as it stood when rectification was undertaken.

Conclusion: The rectification was within jurisdiction and the assessee's challenge failed.

Ratio Decidendi: For the purposes of section 35 of the Indian Income-tax Act, 1922, the record of appeal includes the material and evidence forming the basis of the assessment, and a mistake apparent from that record may be corrected even if it becomes evident by reason of a subsequent final determination affecting the same assessee's related assessment.

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