Revisionary jurisdiction under section 263 upheld where unsupported retraction could not displace the original statement on cash ownership.

Section 263 revision was upheld where the original assessment treated cash of Rs. 6,05,000 on a substantive basis despite the assessee's own earlier statement that it belonged to the angadia firm. The retraction was found unreliable, and the claim that the amount arose from diamond business was unsupported by books, bank records, or other credible evidence. In these circumstances, the assessment order was treated as erroneous and prejudicial to the interests of revenue, and the Commissioner was justified in directing that the amount be assessed on a protective basis.

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Issues: Whether the Commissioner was justified in invoking revisionary jurisdiction under section 263 of the Income-tax Act, 1961, and converting the assessment of the amount of Rs. 6,05,000 from substantive to protective basis.

Analysis: The assessee, an employee carrying cash for an angadia firm, initially stated before the police and the authorised officer that the cash belonged to the firm, but later retracted and claimed to have earned the amount from diamond business. The Tribunal held that the retraction was unreliable, the alleged business story was not supported by books, bank records, or credible evidence, and the original assessment on a substantive basis did not accord with the facts and legal position. Since the assessee himself had offered the amount to assist the firm and the earlier years had been assessed protectively, the assessment order was held to be both erroneous and prejudicial to the interests of revenue.

Conclusion: The invocation of section 263 was valid and the Commissioner was justified in directing protective assessment of the amount.

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