TaxTMI 
TaxTMI 
2025 (2) TMI 1689
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....-03-2021, for the Assessment Year (AY) 2015-16, revising the assessment order passed under Section 143(3) dated 20-11-2017 by the Dy. Commissioner of Income Tax, Central Circle - 1(1), Ahmedabad (hereinafter referred to as "AO"). Facts of the Case: 2. The assessee had filed its return of income declaring Long Term Capital Gain (LTCG) of Rs. 1,29,20,843/- on the sale of 53,000 shares of Kappac Pharma Ltd., which were purchased off-market through Shaswat Stockbrokers Pvt. Ltd. The case was selected for scrutiny, and assessment was completed under Section 143(3) of the Act, wherein the AO treated the LTCG as bogus and made an addition under Section 68 of the Act, but allowed the deduction of purchase cost of Rs. 11,68,371/-. Subsequently....
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.... in the impugned order taken the view that entire sales consideration on sale of shares is required to be taxed u/s 68 of the Act instead of amount of LTCG as shown by the appellant and as done by the AO. The learned CIT having not properly considered/appreciated the submission of the appellant filed before him, the impugned order u/s.263 of the Act requires to be quashed as bad in law and without jurisdiction. 2. The learned CIT has erred in law and on facts in failing to consider the fact that the appellant having furnished the complete details/evidences in support of the LTCG earned and after considering such material/evidences and cross enquires, the AO had come to a definite conclusion and a particular view was taken, the mere....
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....ed that the assessment order dated 20-11-2017 had merged with the CIT(A)'s order dated 22-01-2021, and since the addition itself had been deleted, there was no surviving basis for revision under Section 263 of the Act. The AR pointed out that even though para 6.1 of the PCIT's order acknowledges that the CIT(A) had already deleted the addition, the PCIT still proceeded with revisionary jurisdiction, which is legally untenable. The AR also stated that the AO had taken a possible and legally sustainable view while making the addition and allowed the purchase cost and since the CIT(A) had already set aside the addition, there was no prejudice to revenue, making Section 263 inapplicable. 5. The Departmental Representative (DR) relied on the ....
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.... thus, there was no surviving basis for revision under Section 263 of the Act. However, the PCIT disregarded this submission and proceeded with the revisionary order directing the AO to disallow the deduction of purchase cost of Rs. 11,68,371/- under Section 115BBE(2) of the Act. 6.1. In our considered view, the revisionary order passed by the PCIT is unsustainable in law. The doctrine of merger is well established and has been upheld by various judicial pronouncements which categorically held that once an assessment order is adjudicated upon by the first appellate authority, it merges with the appellate order and cannot be revised under Section 263 of the Act. Further, it is pertinent to note that the PCIT himself acknowledged in para 6....