Assessment merger bars Section 263 revision where CIT(A) has already deleted the disputed addition.

Where the CIT(A) had already deleted the addition relating to alleged bogus long-term capital gain, the assessment order merged with the appellate order and the same issue could not be revised again under Section 263. The requisite conditions for revision, namely that the assessment order be both erroneous and prejudicial to the interests of revenue, were not satisfied once the appellate authority had adjudicated the matter and granted relief. The PCIT could not reopen the issue merely because a different view was preferred. The revision was therefore without jurisdiction and was quashed in favour of the assessee.

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Issues: Whether revision under Section 263 of the Income-tax Act, 1961 was valid after the assessment order had merged with the appellate order of the CIT(A) deleting the addition, and whether the PCIT could still revise the assessment on the same issue.

Analysis: The assessment was completed under Section 143(3) and the AO had made an addition treating the long-term capital gain as bogus while allowing purchase cost. The CIT(A), under Section 250, later deleted the entire addition after considering the evidence and submissions, thereby disposing of the very issue sought to be revised. Once the appellate authority had adjudicated the matter, the assessment order merged with the appellate order. In that situation, the precondition for invoking Section 263, namely that the assessment order must be both erroneous and prejudicial to the interests of revenue, was not satisfied. The revisionary authority could not reopen the matter merely because it took a different view, especially when the appellate order had already granted relief and the issue had attained finality in favour of the assessee.

Conclusion: The revision under Section 263 was without jurisdiction and was quashed. The issue is decided in favour of the assessee.

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