NAVI MUMBAI SEZ PVT. LTD,MUMBAI vs. ACIT (OSD) RG -7, MUMBAI

At the outset, the Ld. Counsel for the Assessee submits that the issues in both these appeals arise out of the consequential assessment order passed u/s 143(3) giving effect to the order of the Ld. CIT passed u/s 263 of the Act. The Ld. Counsel for the Assessee submits that the appeal filed by the Assessee against the order passed by the Ld. CIT u/s 263 has been allowed by the Tribunal in dated 9.3.2017. The Ld. Counsel for the Assessee inviting our attention to para 9 of the Tribunal’s order submits that the order passed by the Ld. CIT u/s 263 has been quashed and therefore consequential assessments made u/s 143(3) r.w.s 263 will not survive. He submits that the present appeals filed by the Assessee and the Revenue becomes infructuous in view of the Tribunal’s order quashing the 263 proceedings.

We have perused the order of the Coordinate Bench in dated 9.3.2017. In para 9 of the order, the Tribunal quashed the revision order passed u/s 263 of the Act observing as under : “9. We find from the above facts that the CIT has given directions merely to verity the expenses claim u/s 57(iii) of the Act in the computation of income by the assessee and the same have been explained earlier also. We also find that issue of taxing of interest earned on deposits under the head income from other source and granting of deduction for interest paid on borrowed funds utilized to earn such interest on deposits had been duly considered by the AO while completing assessment u/s 143(3) of the Act. We find that the AO had examined this issue and the facts of the case during assessment proceedings and as such the CIT has no power to direct the AO to reexamine the same by passing a revision order u/s 263 of the Act merely because CTT(A) holds a different view from the view taken by the AO. Hence, we quash the revision proceedings passed u/s 263 of the Act and allow the appeal of the assessee.”

Since the order passed u/s 263 by the Ld.CIT has been quashed, the consequential assessment order passed by the Assessing Officer u/s 143(3) r.w.s 263 will not survive. Consequently the present appeals arising out of the consequential assessment order passed u/s143(3) r.w.s.263 will not survive. Hence both the appeals are dismissed as infructuous.

In the result, appeals of the Assessee and Revenue are dismissed.