Section 263 revision fails where assessment followed proper inquiry into sale consideration and section 50C issues.

Revision under section 263 was held unsustainable because the Assessing Officer had made adequate inquiry into the sale consideration and the possible application of section 50C before accepting the returned income. The record showed that notices were issued, relevant documents and bank statements were examined, and the assessee's explanation was considered. On those facts, the assessment could not be described as erroneous or prejudicial to the interests of the Revenue merely because the Principal Commissioner preferred a different view on the same material. The revisional order was quashed and the assessee succeeded.

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Issues: Whether the Principal Commissioner was justified in revising the assessment under section 263 of the Income-tax Act, 1961 on the ground that the Assessing Officer had not made proper inquiry into the sale consideration and the applicability of section 50C.

Analysis: The assessment record showed that the Assessing Officer had issued notices, called for details regarding the sale deed, stamp valuation, common area, bank statements, agreement and supporting documents, and had considered the assessee's reply before accepting the returned income. The issue of difference between the declared sale consideration and stamp duty valuation was thus examined during assessment. On these facts, the order could not be characterized as passed without inquiry or without application of mind. A revision under section 263 is not sustainable merely because the Principal Commissioner prefers a different view on the same material, where the Assessing Officer has taken a plausible view after inquiry.

Conclusion: The revision order under section 263 was not justified and was quashed; the assessment could not be treated as erroneous and prejudicial to the interests of the Revenue on the facts found.

Final Conclusion: The assessee succeeded because the assessment was held to have been made after adequate inquiry, and the revisional jurisdiction was found to have been wrongly invoked.

Ratio Decidendi: Where the Assessing Officer makes inquiry, calls for relevant evidence, and adopts a plausible view on the material before him, the order cannot be revised under section 263 merely because the Principal Commissioner considers a different conclusion to be preferable.

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