Section 263 revision barred when assessment inquiry was made and a permissible view was adopted on land capital gains.

Section 263 revisional jurisdiction cannot be used where the Assessing Officer has examined the land transaction, called for details, considered the agreement to sell, possession document and capital gains computation, and then adopted one of the permissible views. A mere lack of elaborate discussion in the assessment order does not by itself prove error if the record shows inquiry and application of mind. As the assessment was neither erroneous nor prejudicial to the interests of the Revenue on the facts noted, the revisional order setting aside the assessment was quashed and the assessment under section 143(3) was restored.

---

---

Issues: Whether the Commissioner was justified in invoking revisional jurisdiction under section 263 of the Income-tax Act, 1961 to set aside the assessment on the ground that the Assessing Officer had not properly examined the short-term capital gain arising from the sale of land.

Analysis: The assessment record showed that the Assessing Officer had issued notices, called for detailed particulars, examined the agreement to sell, the subsequent possession document, and the related computation of capital gain, and thereafter accepted the returned income. The revisional power under section 263 can be exercised only when the assessment order is both erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer has taken one of the permissible views after considering the material on record, the order cannot be revised merely because the Commissioner prefers a different view. A mere absence of elaborate discussion in the assessment order does not by itself establish error, if the record shows inquiry and application of mind. On the facts, the land transaction had been examined in scrutiny and the view adopted by the Assessing Officer was a legally sustainable one.

Conclusion: The revision under section 263 was not sustainable and the order setting aside the assessment was quashed.

Final Conclusion: The assessment made under section 143(3) was restored, and the assessee succeeded in challenging the revisional order.

Ratio Decidendi: Section 263 cannot be invoked where the Assessing Officer has made inquiry and adopted a permissible view; revision is justified only if the assessment is both erroneous and prejudicial to the interests of the Revenue.

---