Revisionary jurisdiction under section 263 unjustified where Assessing Officer's plausible view supported; revision set aside.

Revision under section 263 was examined in light of substantial cash deposits, bank entries showing payments to a beverages corporation and prior assessments treating similar receipts as business income; the Tribunal found these factual records provided a plausible basis for the Assessing Officer to treat deposits as business receipts. Because the AO's view was a possible view supported by evidence, the Principal Commissioner lacked cogent material to declare the assessment erroneous and prejudicial; the revision was set aside and the AO's order confirmed.

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Issues: Whether the Principal Commissioner of Income Tax was justified in invoking revisionary jurisdiction under section 263 to treat cash deposits as unexplained credits and direct the Assessing Officer to tax the deposits as income for the assessment year 2017-18.

Analysis: The Tribunal examined the facts that substantial cash deposits were made in the assessee's bank accounts and that the bank statements showed payments to the Andhra Pradesh Beverages Corporation Limited indicating receipt and utilisation of funds from liquor sales.

Analysis: The Tribunal noted that the liquor licence was held in another person's name but found that earlier assessments recorded business income and that the deposits and payments furnished a factual basis to infer the assessee's engagement in the business of purchase and sale of liquor during the impugned year.

Analysis: On this factual matrix the Tribunal concluded that the Assessing Officer's original view treating the deposits as business receipts and estimating income was a possible view and that the Principal Commissioner erred in treating the AO's assessment as erroneous and prejudicial without sufficient justification.

Conclusion: The revision under section 263 was not justified and the order of the Principal Commissioner is set aside; the Assessing Officer's order is confirmed.

Ratio Decidendi: Where factual records including bank statements and prior assessment treatment support a possible view that cash deposits represent business receipts, revisionary action under section 263 is not justified in the absence of cogent material showing the original assessment to be erroneous and prejudicial to revenue.

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