Revision under section 263 sustained for lack of inquiry into stamp duty value implications on immovable property purchase.

Revision under section 263 was upheld because the reassessment and rectification orders were passed without proper inquiry into the applicability of section 56(2)(vii)(b) to the purchase of immovable property at a consideration below stamp duty value. The record showed that the Assessing Officer examined only the sale-side transactions and did not apply mind to the purchase transaction, while also referring to section 56(2)(x), which was not applicable to the relevant assessment year. On that material lapse in inquiry on a relevant issue, the revisional jurisdiction was treated as validly invoked.

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Issues: Whether the revisionary order under section 263 of the Income-tax Act, 1961 was justified on the ground that the reassessment and rectification orders suffered from lack of inquiry and non-application of mind regarding the applicability of section 56(2)(vii)(b) to the purchase of immovable property.

Analysis: The reassessment records showed that the assessee had purchased immovable property for a consideration lower than the stamp duty valuation, giving rise to a material difference. Although the Assessing Officer examined the sale-side transactions and completed reassessment and rectification proceedings, no inquiry was made on the applicability of section 56(2)(vii)(b) to the purchase transaction. The record also showed reliance on section 56(2)(x), which was not applicable to the assessment year under consideration. In these circumstances, the order was treated as having been passed without proper inquiry on a material issue, thereby satisfying the requirements for revision under section 263.

Conclusion: The revisionary jurisdiction was validly exercised and the order under section 263 was upheld.

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