Section 263 revision fails where correction deeds do not create a fresh taxable purchase under section 56(2)(x).

Revisional jurisdiction under section 263 was held unsustainable where the Assessing Officer had made enquiries into the purchase of immovable property, examined the assessee's reply and adopted a permissible view. The property had already been paid for by account payee cheques, possession had been taken in earlier years, and the later registration papers were only correction deeds to cure title defects, not a fresh purchase. On that basis, section 56(2)(x) was inapplicable because the transfer had been completed earlier. The revision was therefore set aside in favour of the assessee.

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Issues: Whether the order passed under section 263 of the Income-tax Act, 1961 was sustainable where the Assessing Officer had made enquiries on the purchase of immovable property and the disputed registration documents were only correction deeds relating to transactions completed in earlier years, rendering section 56(2)(x) inapplicable.

Analysis: The property had already been purchased in earlier years, with full payment made by account payee cheques and possession taken in those years. The later documents executed during the year under consideration were only to cure defects in title and did not amount to a fresh purchase of property. The Assessing Officer had issued notices, called for details, and considered the assessee's reply before completing the assessment. In these circumstances, the preconditions for revisional action were not met, because the assessment order could not be treated as erroneous merely for want of a different view on the applicability of section 56(2)(x). The transaction was already completed in the earlier years by virtue of transfer and possession, so the later correction deed did not attract taxation under section 56(2)(x).

Conclusion: The revision under section 263 was not justified and was liable to be set aside in favour of the assessee.

Ratio Decidendi: Revisional jurisdiction cannot be sustained where the Assessing Officer has conducted an enquiry and adopted a permissible view, and a later document executed only to correct title defects does not create a fresh taxable purchase when transfer had already taken place in an earlier year.

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