Section 263 revision fails where the AO examined evidence and adopted a permissible view on share transactions.

Revisional jurisdiction under section 263 of the Income-tax Act cannot be invoked unless the assessment order is both erroneous and prejudicial to the Revenue, and a mere possibility of a different view on inquiry is insufficient. Here, the assessee had produced documents, bank records, contract notes, demat statements and broker confirmations before the AO, who examined the material and adopted a permissible view on the share transactions. The Principal Commissioner failed to show any lack of inquiry or record adequate reasons to justify revision, so the section 263 order was not sustainable and the Tribunal's order quashing it was upheld.

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Issues: Whether the Principal Commissioner could invoke revisional jurisdiction under section 263 of the Income-tax Act, 1961, and whether the Tribunal was justified in quashing the revision order for want of any substantial question of law.

Analysis: The assessee had furnished the relevant documents, bank records, contract notes, demat statements, broker confirmations, and other evidence before the Assessing Officer during reassessment proceedings. The Assessing Officer had examined the materials and adopted a permissible view on the share transactions. The Principal Commissioner did not record adequate reasons to establish that the assessment order was both erroneous and prejudicial to the interests of the Revenue, and no failure of inquiry warranting revision was demonstrated. In such circumstances, the revisional power could not be exercised merely because a different view on adequacy of inquiry was possible.

Conclusion: The invocation of section 263 was not justified, and the Tribunal's order quashing the revision was upheld.

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