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2015 (9) TMI 1720 - AT - Income TaxRevision u/s 263 by CIT - period of limitation - disallowance of interest u/s 36(1)(iii) - application of gross profit rate of 24.57% on the turnover of the assessee after rejecting the books of account of the assessee under section 145(3) - HELD THAT:- It is not in dispute that the original assessment order in this case was passed on 26/12/2008 and the same dealt with application of gross profit rate of 24.57% on the turnover of the assessee after rejecting the books of account of the assessee under section 145(3). It is also not in dispute that reassessment proceedings were initiated for making disallowance of interest under section 36(1)(iii) - also not in dispute that the proceeding under section 263 were initiated for applying the GP rate of 24.57%, on a turnover shown in the audited balance sheet filed to the bank as against the GP rate applied by the AO on a turnover shown in the audited balance sheet filed alongwith return of income. It is evident from the above that the error related to application of G.P. rate and had crept in the order passed u/s 143(3) on 26/12/2008.The order passed u/s 147 had nothing to do with this issue. Therefore the order u/s 143(3) would subsist and would not merge with the order u/s 147. The limitation for the passing of order under section 263 was to be taken into consideration from the date of passing of order u/s 143(3) i.e. 26/12/2008. The limitation in the present case therefore expired on 31/03/2011. The impugned order under section 263 having been passed on 22/03/2013 it is well beyond the period of limitation. In view of the same we hold that the impugned order is barred by limitation. Accordingly the order of the Ld. CIT u/s 263 is vacated. - Decided in favour of assessee.
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