Revision under section 263 fails where the Assessing Officer has adopted a legally sustainable possible view on land acquisition interest.

Section 263 revision is unavailable where the Assessing Officer has examined the acquisition record, applied the relevant law and case law, and adopted one of the possible views on taxability. The article explains that the Commissioner cannot revise an assessment merely because another view is preferred; the order must be both erroneous and prejudicial to the Revenue. On the underlying issue, interest arising from compulsory acquisition of land was analysed by reference to whether it compensated deprivation of money after valid vesting or reflected the right to retain possession, with the facts supporting treatment as a capital receipt. The revisional order was held unsustainable and the assessment based on the Assessing Officer's view was restored.

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Issues: Whether the Commissioner could invoke revision under section 263 on the ground that the Assessing Officer had taken an untenable view on the taxability of interest received in connection with compulsory acquisition of land, and whether such interest was a capital receipt or revenue receipt.

Analysis: The Assessing Officer had examined the acquisition proceedings, the relevant provisions of the Land Acquisition Act, 1894, and the applicable case law, and had adopted one of the possible views on the character of the receipt. The governing principle is that revisional jurisdiction under section 263 cannot be exercised merely because the Commissioner prefers another view; the assessment order must be both erroneous and prejudicial to the interests of the Revenue. On the merits, the decision turned on whether the interest was paid for deprivation of money after valid vesting or in lieu of the right to retain possession where possession was taken outside the statutory framework. The material relied upon supported the view that such receipt could be treated as capital in nature in the facts of the case.

Conclusion: The invocation of section 263 was not sustainable because the Assessing Officer's view was a possible view. The revision order was therefore not valid, and the assessee succeeded.

Final Conclusion: The revisional order was quashed, and the assessment made on the basis of the Assessing Officer's view stood restored.

Ratio Decidendi: Revisional jurisdiction under section 263 cannot be assumed where the Assessing Officer has adopted a legally sustainable possible view on a debatable issue, including the characterization of interest arising from land acquisition as capital or revenue receipt.

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