Double taxation barred where income already disclosed under other heads was wrongly added again as business income.

Income already disclosed under the correct statutory heads cannot be brought again to tax as business income merely because of an error in return preparation. The ITAT noted that the receipts later added to business income had already been reflected under heads such as house property, exempt income, interest and partner-related receipts, and that the return should have been prepared by taking net profit from the profit and loss account after reducing amounts taxable elsewhere. As the rectification-based enhancement would have resulted in double taxation, the addition was deleted and the assessee succeeded.

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Issues: Whether the enhancement of business income by Rs. 7,10,020 while processing the rectification application under section 154 was justified, or whether it resulted in double taxation of income already disclosed under other heads in the return.

Analysis: The assessee's return and profit and loss account showed that the receipts and items later added to business income had already been reflected in the return under appropriate heads such as house property, exempt income, interest, and partner-related receipts. The Tribunal found that, while preparing the return, the assessee ought to have taken the net profit from the profit and loss account and reduced the amounts taxable under other heads. On the material on record, the impugned addition arose from a mistake in filling the return and led to taxation of the same income twice.

Conclusion: The addition of Rs. 7,10,020 was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The assessee's appeal succeeded and the impugned enhancement made during rectification did not survive.

Ratio Decidendi: Income already disclosed and taxed under the correct statutory heads cannot again be brought to tax as business income merely because of an error in return preparation, where the result would be double taxation.

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