Revision under section 263 fails where the Assessing Officer made due enquiry and adopted one permissible view.

Section 263 revision could not be sustained where the Assessing Officer had examined the short-term capital loss claim, called for details, considered the assessee's reply, and accepted the claim after enquiry in both original and reassessment proceedings. As no defect, lack of enquiry, or demonstrable error was identified in the assessment order, the Principal Commissioner could not invoke revision merely because a different view on the merits was possible. An assessment order is not erroneous and prejudicial to the interests of the Revenue when it reflects one of the permissible views taken after due enquiry. The revisionary order was quashed in favour of the assessee.

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Issues: Whether the revisionary order under section 263 was sustainable when the Assessing Officer had made enquiries into the short-term capital loss claim, considered the assessee's reply, and taken one of the possible views.

Analysis: The assessment records showed that the claim of short-term capital loss had been examined in the original assessment as well as in the reassessment proceedings. The Assessing Officer had issued a notice calling for details, received the assessee's reply, and thereafter accepted the claim after enquiry. The Principal Commissioner did not point out any defect or lack of enquiry in the Assessing Officer's approach. In such a situation, the jurisdiction under section 263 could not be invoked merely because a different view was held on the merits. An order cannot be treated as erroneous and prejudicial to the interests of the Revenue where the Assessing Officer has adopted one of the permissible views after due enquiry.

Conclusion: The revisionary order under section 263 was unsustainable and was quashed; the issue was decided in favour of the assessee.

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