Assessee's Appeal Allowed: Assessment Order Upheld, Revision Order Quashed

The Tribunal allowed the assessee's appeal, holding that the assessment order was not erroneous and prejudicial to revenue's interest. The impugned revision order under section 263 was quashed as the Principal CIT erred in applying Section 56(2)(vii)(b) retrospectively to the property purchase transaction.

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Issues involved:
The judgment involves the challenge against the revision order passed under section 263 of the Income-tax Act, 1961 regarding the assessment order for AY 2015-16.

Grounds of appeal and Additional Ground:
The assessee challenged the invocation of revisionary proceeding under section 263 of the Act and the subsequent order passed. An additional ground was raised contending that the exercise of power under section 263 was beyond the purview of the Assessing Officer as the case was selected for limited scrutiny only for the issue of "purchase of property."

Assessment and Revision Order:
The assessee filed the return of income reporting a total income. The case was selected for limited scrutiny based on the issue of "purchase of property." The assessment was completed by accepting the returned income. The Principal CIT found an omission in assessing the differential amount under section 56(2)(vii)(b) of the Act. The assessee provided detailed explanations, but the Principal CIT directed a fresh assessment order, leading to the appeal before the Tribunal.

Contentions and Analysis:
The key issue was the applicability of Section 56(2)(vii)(b) concerning the purchase transaction of the property. The Tribunal noted that the law was introduced after the execution of the agreement for purchase of the property. The pre-amended law did not cover situations where property was received with inadequate consideration. The Tribunal held that the Principal CIT erred in applying the provision retrospectively and quashed the revision order under section 263.

Conclusion:
The Tribunal allowed the assessee's appeal, holding that the assessment order was not erroneous and prejudicial to the revenue's interest. The impugned order under section 263 was quashed based on the analysis of the applicability of Section 56(2)(vii)(b) in the case.

Separate Judgment:
No separate judgment was delivered by the judges in this case.

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