Capital gains cannot be charged on sale consideration not actually received, and revision under section 263 was unjustified.

Revisional interference under section 263 of the Income-tax Act is permissible only when the assessment order is both erroneous and prejudicial to the Revenue; on the facts, that threshold was not met because the assessee had not received the larger amount reflected in the later sale deed, so revision was unjustified. Capital gains could not be fastened on the assessee for the entire stated sale consideration where the record showed that only the originally agreed amount was received by her and the balance was received by the confirming party. The larger consideration could not be taxed in the assessee's hands, and any tax consequence on the balance lay in the hands of the recipient.

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Issues: (i) Whether the Commissioner was justified in revising the assessment under section 263 of the Income-tax Act, 1961; (ii) whether capital gains could be fastened on the assessee for the entire sale consideration stated in the sale deed, though a substantial part was received by the confirming party and not by the assessee.

Issue (i): Whether the Commissioner was justified in revising the assessment under section 263 of the Income-tax Act, 1961

Analysis: Revisional power under section 263 can be exercised only where the assessment order is erroneous and prejudicial to the interests of the Revenue. The Tribunal had relied on earlier reasoning on similar facts, and the Court found that the assessee had not received the larger amount said to have been paid under the later sale deed. The factual basis for treating the assessment as erroneous was therefore not made out.

Conclusion: The revision under section 263 was not justified.

Issue (ii): whether capital gains could be fastened on the assessee for the entire sale consideration stated in the sale deed, though a substantial part was received by the confirming party and not by the assessee

Analysis: The assessee was shown as seller in the sale deed, but the record showed that only the originally agreed amount was received by the assessee and the balance was received by the confirming party. Since capital gain cannot be charged on an amount never received by the assessee, the Commissioner could not attribute the entire consideration to her. Any tax consequence on the amount received by the confirming party would arise in that recipient's hands.

Conclusion: The larger sale consideration could not be taxed as capital gain in the assessee's hands.

Final Conclusion: The Revenue's challenge failed, and the assessment as accepted by the Tribunal was left undisturbed.

Ratio Decidendi: For capital gains purposes, the assessee cannot be charged on sale consideration not actually received by her, and revisional interference is unwarranted where the assessment is not shown to be erroneous on that basis.

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