HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Mahendra Mills Ltd. v. Shri P. B. Desai, Appellate Assistant Commissioner of Income Tax and Anr.
Civil Appeal No. 1793 of 1970 — Single appeal from Gujarat High Court Special Civil Application No.1259 of1969.
[1975] 3 SCR 846 ·
Indian Income-tax Act, 1922 · 1922 Act: 35
Holding and result. A later Tribunal determination of one year's closing stock formed part of the relevant record for rectifying the next year's opening stock under section 35 of the 1922 Act.
Sources & disclosures includedDownload original judgment / order
3-judge bench · V.R. Krishna Iyer · R.S. Sarkaria · A.C. Gupta
Assessment years: 1959-60, 1960-61
01 · Facts of the case
The ITO increased 1959-60 closing stock from Rs.5,89,439 to Rs.8,04,121. While that appeal was pending, the AAC adopted the higher figure as 1960-61 opening stock in June 1965. In January 1969 the Tribunal restored the lower closing-stock figure. The AAC then rectified his 1960-61 order in June 1969, withdrawing Rs.2,14,682 relief; the assessee challenged his jurisdiction.
02 · Discussion by the Hon’ble Court
The record was not confined to the papers physically before the AAC when he first decided the appeal. Closing stock supplied the next year's opening stock, so the two assessments overlapped on that fact. The Tribunal's substituted finding replaced the ITO's valuation from the original order's date and was relevant to the later year's appeal. The resulting mismatch was apparent when rectification occurred. Maharana Mills and Khem Chand Ramdas supported considering related proceedings, including the superseding order.
03 · Judicial decision
The AAC could consider the Tribunal's later stock finding and rectify the opening-stock mistake under section 35. Both the narrow-record and subsequent-event objections failed.
04 · Outcome / in whose favour
Revenue Assessee's appeal dismissed with costs; the rectification stood. Substantive historical income-tax issue decided No current-law or comprehensive later-treatment certification.
05 · AKHB REVIEW POINT
Trace the exact factual link and effect of the superseding order. This stock-continuity ruling is not a licence to reopen any closed assessment for collateral developments: the Court expressly retained section 35's restricted jurisdiction and fact-specific application.
Assessment years and limits
- years
- 1959-60; 1960-61
- qualification
- Only years material to the issues described are listed; different claims may cover different years as stated in the facts.
Reported citation
Supplied SCR report citation; no machine-generated neutral citation substituted.Statutory context
Operative provision is section35 of the Indian Income-tax Act,1922. The report's1961 headnote and section154 notice reference do not change the provision the Court expressly interprets.Source & verification
Download original judgment / order · Open cited source rendition
Unchanged supplied SCR report; catalog identifies a CC-BY-4.0 public eSCR mirror. Not represented as a separately fetched official signed PDF. Complete single-case report, physical pages1-8, SCR846-853. Reasons begin page2; final dismissal page8. No neighboring-case text.
- Headnote labels the statute Income-tax Act1961 section35; reasons expressly identify and quote1922 section35.
- Narrative prints the ITO's request as26March1959; quoted rectification order identifies the letter as26March1969. Both source readings are preserved.
- A notice is described as under section154, but the challenged rectification and holding are under1922 section35.
Statutory scope
Indian Income-tax Act, 1922. The historical operative enactment is identified. Other enactment references are source context only unless expressly identified as operative; no 2025 mapping is asserted.
Later treatment
Source checked 2026-10-09. Subsequent appeals, review proceedings, stays, reversals and later treatment have not been comprehensively checked. This is not a citator status certificate.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
AI disclosure & professional disclaimer
AI-assisted research. The AKHB Review Point is editorial analysis, not part of the Court’s judgment.
AI-assisted legal research note for general information and professional research. Verify the original judgment, applicable statutory version and later treatment before reliance. The AKHB Review Point is editorial analysis.