2013 (5) TMI 46

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....1995-96 for a consideration of Rs.3,46,520/-. He started construction of the building in April 1999. He agreed to sell the said property under the agreement dated 9-9-2000 in unfinished condition. Under the terms of agreement, the assessee should complete the construction of the building before execution of sale deed with the help of the funds provided by the purchaser. On 22-11-2000 the assessee executed a sale deed in favour of the purchaser for a consideration of Rs.1,38,00,000/-. The assessee received a sum of Rs.40,00,000/- at the time of agreement. The total cost of construction was Rs.1,04,30,425/-. Thereafter, the assessee purchased another property at Koramangala. The Assessing Officer computed the income from the long term capital....

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.... jurisdiction under Sec.263 of the I.T. Act should have recorded a finding that the claim under Sec.54A of the Act is erroneous and therefore prejudicial to the interest of the revenue before setting aside the assessment year and remitted the matter back for fresh consideration?" 4. Learned counsel appearing for the revenue assailing the impugned order contended that the Tribunal could not have computed the capital gain as it is the job to be done by the Assessing Authority and therefore, the Tribunal committed a serious error in interfering with the order of the revisional authority. He submitted that the revisional authority while exercising power of revision, could have passed a final order on merits, but it also has discretion and the ....

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....lso erroneous, he gets jurisdiction to interfere with the said order under Section 263. Therefore, for attracting Section 263, the condition precedent is (a) the order of Assessing officer sought to be revised is erroneous and (b) it is prejudicial to the interest of the Revenue. If one of them is absent, i.e., if the order of the Income tax officer is erroneous but is not prejudicial to the Revenue, recourse cannot be had to Section 263(1) of the Act. The satisfaction of both the conditions stipulated in the Section is sine quo non for the Commissioner to exercise his jurisdiction under Section 263.    17. In this background, if we look into the facts of the case, as the provisions of Section 155(14) was not in the statute book ....

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....was not a lawful amount to the Government. It was an amount which should have been refunded to the assessee. Therefore, the condition precedent for exercising the revisional power under Section 263 of the Act is that the order under revision should not only be erroneous, but such erroneous order should result in prejudice to the interest of the revenue. Mere error would not confer jurisdiction to exercise revisional power under Section 263 of the Act. 7. We have gone through the order passed by the revisional authority. It is a very cryptic order. It neither points out an error nor prejudice which has caused to the revenue. After declaring that the order is prejudicial, it refers to the notice being issued to the assessee and the assessee....