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Issues which are not subject matter of the reassessment, do not merge in the reassessment order. It is because of this reason that the revision u/s263 initiated in [2022] 98 ITR (Trib) 79 (ITAT[Pat]) failed. 

In this case the reassessment was taken up initially on one issue of examination of certain credit entries in bank but that did not materialise and proceedings were dropped once the assessee explained them to the AO. 

Subsequently CIT made a wish to challenge the reassessment on the pretext that the AO did not examine/inquired the capital gains exemption claimed in ITR. 

The Tribunal held that if no addition was made in the reassessment order on the issue for which it was reopened, then any other addition could not be made as per law. Therefore, the reassessment order in the case could not be termed as erroneous even though this may be termed as prejudicial. 

In the consequence the limitation for seeking to revise assessment on an unopened issue would run from original assessment which in this case exceeded a period of more than two years

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