Section 263 revision fails where the Assessing Officer made enquiries and took a plausible view on capital gains timing.

Revision under section 263 is available only when the assessment order is both erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer has made enquiries, considered replies, and adopted one of two possible views on the facts and law, revision cannot be invoked merely because another view is possible or because the assessment order is brief. On the facts, the agreement to sell and possession agreement showed that transfer occurred in the earlier year, the assessee disclosed the capital gains accordingly, and the Assessing Officer examined those materials during assessment. The revisionary order was therefore unsustainable.

---

---

Issues: Whether the Principal Commissioner could revise the assessment under section 263 on the ground that the Assessing Officer had not properly examined the capital gains arising from the transfer of immovable property and whether the assessment order was erroneous and prejudicial to the interests of the Revenue.

Analysis: Revision under section 263 is permissible only when both statutory conditions are satisfied, namely that the assessment order is erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer has made enquiries, obtained replies, and adopted one of two possible views on the facts and law, revisional jurisdiction cannot be exercised merely because a different view is possible or because the order does not contain an elaborate discussion. On the facts, the agreement to sell and possession agreement showed that the transfer took place in the relevant earlier year, the assessee had disclosed the capital gains accordingly, and the Assessing Officer had examined these details during assessment.

Conclusion: The revisionary order was unsustainable because the assessment order was neither erroneous nor prejudicial to the interests of the Revenue.

---