Section 263 revision failed where enquiry was made on depreciation, receipts and business promotion expenses, and one plausible view was adopted.

Section 263 could not be invoked where the Assessing Officer had made enquiries on the acquisition of office premises, depreciation, professional receipts and business promotion es, and had adopted one plausible view on the material before him. The Tribunal noted that the assessee had paid consideration and taken possession before registration, so the later registration was treated as a formality for acquisition purposes; it also observed that section 50 does not require the asset to be put to use. Professional receipts were fully disclosed, with foreign receipts not subject to withholding tax in India, and the business promotion expense details were furnished during assessment. On these facts, the revisional order was not sustainable.

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Issues: Whether the revisional jurisdiction under section 263 was validly invoked on the footing that the Assessing Officer had not made proper enquiries on (i) taxability under section 50 arising from acquisition of new office premises and the related depreciation claim, and (ii) professional receipts and business promotion expenses.

Analysis: The Assessing Officer had called for details on the acquisition and sale of office premises, the block of assets, depreciation, professional receipts and business promotion expenses, and had accepted one possible view after examination of the material. On the property issue, the assessee had executed the agreement, paid substantial consideration and taken possession before registration, so the subsequent registration was treated as a formality and the transaction was held to relate back for the purpose of acquisition. The Tribunal further noted that section 50 does not require the asset to be put to use, and that the enquiry already conducted by the Assessing Officer negatived the allegation of total absence of enquiry. On the professional receipt issue, the assessee had disclosed the receipts in full and the foreign receipts were not subject to withholding tax in India. On business promotion expenses, the relevant particulars had been furnished during assessment and the revisional order merely directed further verification without demonstrating any real revenue prejudice.

Conclusion: The invocation of section 263 was not sustainable, as the assessment order was neither shown to be erroneous nor prejudicial to the interests of the Revenue on the issues examined.

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