Section 263 revision upheld where the assessment lacked enquiry into section 50C and interest deduction in capital gains computation.

Revisional jurisdiction under section 263 was upheld because the assessment records showed no meaningful enquiry by the Assessing Officer on the applicability of section 50C or on the allowability of interest expenditure in computing long-term capital gains. An assessment made without enquiry on material issues cannot be treated as a conscious adoption of one permissible view and is both erroneous and prejudicial to the interests of the Revenue. The Principal Commissioner was therefore justified in revising the assessment, and the assessee's challenge failed.

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Issues: Whether the Principal Commissioner was justified in invoking revisional jurisdiction under section 263 of the Income-tax Act, 1961 on the ground that the Assessing Officer had not enquired into the applicability of section 50C and the allowability of interest expenditure while computing long-term capital gains.

Analysis: The assessment records disclosed no meaningful enquiry by the Assessing Officer on either the applicability of section 50C or the allowability of interest expenditure connected with the computation of capital gains. In such circumstances, the assessment could not be treated as a conscious acceptance of one permissible view. An order passed without enquiry on material issues is both erroneous and prejudicial to the interests of the Revenue, and therefore falls within the revisional power under section 263.

Conclusion: The revision under section 263 was validly exercised and the assessee's challenge failed.

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