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2019 (5) TMI 1675 - ITAT MUMBAIRevision u/s 263 - doctrine of the merger the assessment - taxability of rental income - business income or house property - HELD THAT:- Commissioner (Appeals) allowed the appeal of the assessee by accepting the lease rental income as ‘business income’. Therefore, before the ld Commissioner (Appeals) there was issue of taxability of rental income, which was duly considered and decided by him. Commissioner (Appeals) decided the issue after examining the memorandum of association of the assessee, nature of the income and facts that similar income was accepted as a business income. In our view the order of assessing officer on point of taxability of lease rental income is merged with the order of Commissioner (Appeals). The revenue/ assessing officer accepted the finding of ld. Commissioner (Appeals) as no further appeal was filed before Tribunal. This fact was brought in the notice of ld. Pr Commissioner in the reply furnished by the assessee. Pr Commissioner took the view that the taxability of rental income as “House Property Income” was not the subject matter before ld. Commissioner (Appeals). In our view the ld. Pr Commissioner is wrong in his approach and the taxability of lease income as was very much before ld. Commissioner (Appeals). Explanation (c) to section 263 places an embargo on the Commissioner in case of subject-matter of any appeal which had been considered and decided in such appeal. Before the ld. Commissioner exercises his jurisdiction under section 263, he is required to ascertain whether the order referred to in subsection (1) of section 263 had been the subject-matter of any appeal, and if yes, the revisional powers should be available only with respect to subject-matter that had not been considered and decided in such appeal. Thus, in the present case, Commissioner was wrong in revising the assessment order on the taxability of rental income as income from house property. Therefore, the order passed by him is not valid. - Decided in favour of assessee
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