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TMI Blog2022 (1) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... i u/s. 263 in No. 6119(10)/263/PCIT-6/2018-19 dated 30.03.2019 is contrary to law and facts of the case. 2. The Principal CIT erred in holding that the order passed u/s. 143(3) by the Assessing Officer on 31.12.2016 is erroneous and prejudicial to the interest of revenue and cancelling the assessment order and directing the Assessing Officer to carry out a thorough enquiry with regard to both the incorrect computation of disallowance u/s. 14A r.w Rule 8D as well as with regard to issue of transfer of shares on account of reverse merger. 3. The Principal CIT erred in overlooking the fact that in the original assessment completed u/s. 143(3), the Assessing Officer has disallowed Rs. 77,36,000/- u/s. 14A r.w. Rule 8D and on appeal, the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble ITAT may be pleased to cancel the order passed by the Principal CIT u/s. 263." 2. The Ld. AR, drawing our attention to the impugned order and grounds of appeal, submitted that revision has been invoked on two counts viz. (i) Incorrect exemption from capital gains tax on account of reverse merger; (ii) incorrect working of disallowance u/s. 14A. The Ld. AR submitted that even in consequential order, Ld. AO has examined the issue of capital gain on reverse merger and has not made any adjustment/addition and thus, the original assessment order could not be said to be erroneous or prejudicial to the interest of the revenue for which revision would be required u/s. 263. Regarding disallowance u/s. 14A, Ld. AR submitted that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal vide ITA No. 1298/Chny/2019 dated 08.09.2021 wherein the bench considering the decision of Hon'ble Madras High Court in the case of Redington India Private Ltd. (392 ITR 633) as well as the decision in CIT V/s Chettinad Logistics Private Ltd. (95 Taxman 250) dismissed revenue's ground of appeal. 5. In the meantime, upon perusal of case records for the year, Ld. Pr. CIT sought revision of original assessment order u/s. 263 vide order dated 30.03.2019 and issued a show-cause notice to the assessee during revisional proceedings. The reasons were two-fold i.e. (i) Incorrect exemption from capital gain tax on account of reverse merger; (ii) incorrect working of disallowance u/s. 14A. In the notice, it was alleged that disallowance u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(iii) to Rs. 175.14 Lacs. However, no addition has been made on account of reverse merger which would support the argument of Ld. AR that original assessment order would could not be termed as erroneous and prejudicial to the interest of the revenue on this count. We concur with these arguments and would accordingly, hold that revision u/s. 263 was not justified on this issue. 8. So far as the disallowance u/s. 14A is concerned, it is quite discernible that this disallowance was subject matter of original assessment proceedings and Ld. CIT(A) had already deleted the disallowance vide order dated 30.01.2019. The revenue's ground of appeal, on this issue, stood dismissed by Tribunal vide order dated 08.09.2021. Nevertheless, it could no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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