JUDGMENT This appeal of Revenue challenges order passed by Incometax Appellate Tribunal, Mumbai Bench, Mumbai, on September 14, 2012, in Income Tax Appeal No. 3024/Mum/2012. order was passed by Tribunal on assessee's appeal, which was directed against order of Commissioner of Income-tax dated March 29, 2012. said Commissioner exercised power under section 263 of Income-tax Act, 1961, and correctness of that exercise was put in issue by assessee before Tribunal. Mr. Mohanty, appearing for Revenue, after inviting our attention to section 263 of Income-tax Act, 1961, and particularly Explanation (c) to sub- section (1) of said section, submitted that clause (c) of said Explanation to sub-section (1) will not be attracted, as Commissioner sought to revise order of Assessing Officer on matters which had not been considered and decided in appeal against order of Assessing Officer. In other words, though order of Assessing Officer was challenged in appeal before Commissioner of Income-tax (Appeals), that appellate authority did not consider matters which are subject of revisional exercise. In such circumstances, Tribunal's order, holding that there was merger, raises substantial questions of law. Mr. Mohanty also invited our attention to rule 9A of Income-tax Rules, 1962, to submit that applicability of this rule and to given facts and circumstances was not subject matter of appellate exercise. In such circumstances, he submits that appeal deserves to be admitted. Mr. Mistri, learned senior counsel appearing for assessee-respondent, on other hand, submits that there is no merit in this appeal. Once there is finding of fact by Tribunal that clause (c) of Explanation below sub- section (1) does not apply then principle of merger is attracted. After order passed by Assessing Officer merges with that of Commissioner of Income-tax (Appeals) then power under section 263 of Income-tax Act, 1961, cannot be exercised. That power also cannot be exercised because Commissioner, while seeking to revise order of Assessing Officer, failed to note that order of Assessing Officer was challenged in appeal. That appeal was decided on October 12, 2011. Assessing Officer has given effect to direction in appellate authority's order. It is that order, whereby Assessing Officer gives effect to above direction, which is sought to be revised by Commissioner under section 263 of Income-tax Act, 1961. That was plainly and clearly impermissible given above doctrine. Thirdly, Commissioner did not put assessee to notice on certain aspects which he took into consideration inasmuch as he directed by order passed on March 29, 2012, that Assessing Officer must inquire into issue as to whether assessee had sold its share of theatrical rights in film Darna Zaroori Hai to M/s. RGV Enterprises for 25 lakhs as is claimed by it. Assessing Officer must give specific finding whether this claim is acceptable or not. Mr. Mistri submits that Tribunal also set aside order of revisional authority because show-cause notice purporting to revise order of assessment dated December 31, 2009, did not mention this sale of share of theatrical rights to M/s. RGV Enterprises. If assessee was not put to notice of this issue then final order of Commissioner revising Assessing Officer's order takes into consideration something which is not part of show-cause notice. On that ground also Tribunal rightly interfered with revisional authority's order. Consequently, this appeal does not raise any substantial question of law. More so, when Revenue has put in issue correctness of order passed on October 12, 2011, by first appellate authority and appeal before Tribunal is pending. With assistance of both counsel, we have perused appeal paper book including all orders. On own showing of Revenue, revisional authority issued notice to show cause by invoking powers under section 263 of Incometax Act, 1961. That was because assessee who was engaged in business of production, financing and distribution of cinematographic films, filed return of income on September 10, 2009, declaring income at Rs. 87,64,620. assessment order under section 143(3) read with section 153A of Income-tax Act, 1961, was passed by Assessing Officer on December 31, 2009, assessing income of assessee at Rs. 14,37,20,890. order passed by revisional authority, copy of which is at annexure C, in paragraph 2 makes specific reference to assessee's production of films C, in paragraph 2 makes specific reference to assessee's production of films in year under consideration, namely, assessment year 200607 and one of films Darna Zaroori Hai. assessee claimed to have incurred expenses of Rs. 6,99,73,052 for production of this film. During course of assessment proceedings, assessee furnished, before Assessing Officer, details of its income from operations, vide letter dated September 7, 2009. As per these details, assessee claimed that it has earned income of Rs. 11,25,00,000 from this film. Later on, however, assessee claimed before Assessing Officer that this was not income from production of film but this was sum received as share application money from various persons. break-up of receipt and to tune of Rs. 11 crores was provided by assessee to Assessing Officer. Assessing Officer, therefore, had before him explanation of assessee that this amount of Rs. 11,25,00,000 could not be considered as income from film Darna Zaroori Hai. income was only Rs. 25 lakhs. Assessing Officer did not accept this claim of assessee and took income at Rs. 11,25,00,000. He, therefore, took into consideration this sum while passing assessment order. Then, assessee had, before Assessing Officer, pointed out that if this sum and as computed above can be termed as income from film then in terms of rule 9A of Income-tax Rules, 1962, when film is released for exhibition on commercial basis at least ninety days before end of previous year then cost of production of film is to be allowed as deduction and that is restricted to extent of income earned and balance part of cost of production expenses are to be allowed as income of previous year. film Darna Zaroori Hai was released on promotional basis on February 22, 2006, and its commercial release was on April 28, 2006. computation of expenses was also provided but Assessing Officer, in his order, came to conclusion that details as provided are not reflecting cost of production. He therefore, in his detailed order and after going through application, granted deduction to extent of sum debited to profit and loss account and to extent of Rs. 24,84,34,124. He disallowed balance of Rs. 2,34,91,380. revisional authority was aware of fact that against such order of Assessing Officer, assessee has preferred appeal to Commissioner of Income-tax (Appeals). Ground No. 1 of that appeal was whether, on facts and in circumstances and in law, Assessing Officer erred in addition of alleged suppressed business profit aggregating to Rs.11 crores as per order dated December 31, 2009 (paragraph 9.2). first appellate authority, in dealing with this ground, in its order dated October 12, 2011, concluded that after that consideration of submissions of assessee, in backdrop of facts of this case, it is evident that addition made by Assessing Officer cannot be sustained. In paragraph 1.6 of order passed by first appellate authority on October 12, 2011, this conclusion is reached. Then, ground No. 2 in that appeal was whether, in facts and in circumstances and in law, Assessing Officer erred in disallowing alleged cost of production claimed amounting to Rs. 2,34,91,380 as per paragraph 10 of impugned order. In other words, if amount of Rs. 11,25,00,000 is not taken to be income of assessee from film Darna Zaroori Hai then by applying rule 9A, cost of production of this film deserves to be deducted and in full as claimed by assessee. From paragraph 2.1 onwards in appellate order, this aspect has been dealt with. When this aspect was considered by first appellate authority, not only did he have before him record pertaining to Assessing Officer's order dated December 31, 2009, but he called for remand report from Assessing Officer. gist of that remand report is reproduced in paragraph 2.3 of first appellate authority's order. Once copy of remand report was given to assessee for his comments and assessee agreed with remand report then barring addition of Rs. 4,01,467, balance addition made by Assessing Officer came to be deleted. Thus, as against expenses or cost of production to tune of Rs. 27,19,28,504 only sum of Rs. 4,01,467 was deleted. We find that despite this position emerging from record and being undisputed, order under section 263 of Income-tax Act makes detailed reference to show-cause notice. show-cause notice as also this order passed under section 263 make detailed reference to claims of assessee and which were part of appeal before Commissioner and dealt with by him in his order dated October 12, 2011. order of Commissioner under section 263 dated March 29, 2012, from paragraph 8 onwards, makes extensive section 263 dated March 29, 2012, from paragraph 8 onwards, makes extensive reference to these aspects. In circumstances, what further emerges is that not only did revisional authority purport to revise Assessing Officer's order but he purported to deal with same direction which was issued in order of first appellate authority and which was given effect to by Assessing Officer. Meaning thereby, contents of remand report, giving effect to order of first appellate authority, as submitted by Assessing Officer, came to be reconsidered and revisited. In addition thereto, one more aspect of sale of theatrical rights of Darna Zaroori Hai to M/s. RGV Enterprises was considered. Naturally, therefore, doctrine of merger was invoked by assessee and it was applied by Tribunal to uphold objection raised by assessee. In above factual circumstances, we do not find that Tribunal erred in holding that clause (c) of Explanation to sub-section (1) of section 263 of Income-tax Act, 1961, cannot be applied. In present case, that has no application because matters which have been considered and decided in appeal by first appellate authority are being made subject matter of revisional authority's order. In other words, power to revise, as conferred by section 263, is sought to be exercised so as to deal with same matters which have been considered and decided in appeal. We do not find any merit in Mr. Mohanty's submission because detailed references have been made in foregoing paragraphs to case of assessee before Assessing Officer, his initial order, order of first appellate authority, direction issued by first appellate authority and which was given effect to by Assessing Officer. All these would denote that something which was very much part and parcel of appellate authority's order and dealt with extensively therein is now sought to be revised and revisited. Firstly, if income of assessee from film is Rs. 11,25,00,000 then whether explanation of assessee that it is not so deserves to be considered or not by Assessing Officer is grievance No. 1/ground No. 1 before first appellate authority. Secondly, if that is taken to be income of assessee and without admitting it to be so cost of production of film needs to be deducted by applying rule 9A of Income- tax Rules. Thus, that is ground No. 2 in memo of appeal before first appellate authority and in his order dated October 12, 2011. Both these matters are very much part of revisional authority's order dated March 29, 2012. attempt to reopen them cannot be saved as clause (c) of Explanation below sub-section (1) of section 263 of Income-tax Act, 1961, had no application. This conclusion of Tribunal being sustained and in consonance with factual material placed cannot be termed as either perverse or vitiated by any error of law apparent on face of record. We fully agree with Tribunal when it concluded in paragraph 14 that it is evident from order of Commissioner (Appeals) that claim of cost of production of film was subject matter of appeal before him and after consideration of remand report of Assessing Officer he gave his findings. Therefore, this order of Assessing Officer dated December 31, 2009, undisputedly had merged with order of first appellate authority dated October 12, 2011, as far as claim of cost of production of film is concerned. Similarly, other argument that applicability of rule 9A has not been considered by Commissioner, Tribunal in paragraph 15 found that this was also very much before authorities and, hence, even in relation thereto, it cannot be said that Assessing Officer at time of making assessment order did not consider applicability of rule 9A vis-a-vis claim of assessee on aspect of cost of production of film. Therefore, on both grounds, we do not find that appeal raises any substantial question of law. It is, therefore, dismissed. There would be no order as to costs. *** Commissioner of Income-tax v. K. Sera Sera Productions Ltd