Revision under section 263 fails where seized material was already examined and applied in the connected assessment.

Revision under section 263 was held unsustainable where the Assessing Officer had already examined the seized material and used the same documents to make additions in the connected concern as unexplained money. The record did not support the allegation that cash entries in the seized material or the survey statement had been left unverified in the assessee's case. Once the material had been applied in the related assessment, the supposed failure of inquiry was not established, and the search-presumption alone could not justify revision. The assessment order was restored and the revisionary interference was set aside.

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Issues: (i) Whether the revisionary order under section 263 of the Income-tax Act, 1961 was valid when the Assessing Officer had already examined the seized material and made additions in the related concern on the same basis.

Issue (i): Whether the revisionary order under section 263 of the Income-tax Act, 1961 was valid when the Assessing Officer had already examined the seized material and made additions in the related concern on the same basis.

Analysis: The impugned revision was founded on the view that the assessment order lacked proper verification of cash entries recorded in seized material and did not consider the survey statement. However, the record showed that the same seized documents had already been acted upon by the Assessing Officer in the assessment of the connected concern, where additions were made as unexplained money. In those circumstances, the premise that there was a failure to inquire into or verify the seized material in the assessee's case was not sustainable. The presumption under the search provisions could not, by itself, justify revision once the Assessing Officer had already applied the material in the connected assessment and the supposed lapse was not established.

Conclusion: The revisionary order under section 263 was not sustainable and stood quashed in favour of the assessee.

Final Conclusion: The assessment order was restored and the revisionary interference was set aside.

Ratio Decidendi: Revision under section 263 cannot be sustained on alleged lack of inquiry where the Assessing Officer had already considered the same seized material and made substantive additions in the connected assessment on that very basis.

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