Section 263 revision cannot stand when unrebutted material shows genuine transactions and only a further inquiry is sought.

A revision under section 263 of the Income-tax Act was found unsustainable where the assessee had furnished complete details and supporting material for the impugned receipt and payment, and those explanations were not shown to be incorrect or deficient. Once the material prima facie established the genuineness of the transactions, the Principal Commissioner could not invoke revision merely to require a fresh or roving inquiry by the Assessing Officer. The revisionary order was therefore quashed, and the assessee succeeded.

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Issues: Whether the revisionary order passed under section 263 of the Income-tax Act, 1961 could be sustained where the assessee had furnished detailed explanations and supporting material regarding the impugned transactions and no infirmity was found in those details.

Analysis: The revision under section 263 was initiated on the ground that the Assessing Officer had not examined receipt of Rs. 2 lakh from and payment of Rs. 7 lakh to M/s. Nitin Sales Corporation. The assessee placed before the Principal Commissioner complete details, including the source of funds, the supporting tax particulars, and the relevant accounts of the concerned concern. The record showed that these explanations were not found to be incorrect or deficient. In such a situation, once the explanation and material furnished by the assessee prima facie established the veracity of the transactions, the Principal Commissioner could not sustain the revision merely to direct a fresh inquiry by the Assessing Officer.

Conclusion: The revisionary order under section 263 was not sustainable and was quashed, in favour of the assessee.

Final Conclusion: The assessment was not liable to be set aside for de novo scrutiny on the stated ground, and the assessee succeeded in appeal.

Ratio Decidendi: A revision under section 263 cannot be upheld merely because an issue is not discussed in the assessment order if the assessee has furnished complete and unrebutted material showing the transaction to be genuine and the revision is sought only for a further roving inquiry.

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