INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Income Delaration Scheme, 2016 - During pendency of scrutiny assessment assessee made declaration under ID Scheme in respect of long-term Capital gain arising on sale of shares -

Case of assessee was selected for scrutiny under CASS and during pendency of scrutiny assessment, assessee made declaration under Income Declaration Scheme, 2016 in respect of long-term capital gains from sale of shares claimed as exempt in return of income. AO accepted income declared by assessee without making any addition/disallowances. Thereafter, Pr. CIT invoked section 263 on allegation that order passed by AO was erroneous and prejudicial to interest of revenue. Held: AO issued a questionnaire, whereby specific information was sought on transaction of equity shares and working of short-term capital gain/long-term capital gain. Assessee furnished a detailed reply to notice issued under section 142(1), wherein assessee while replying to the query on transaction of shares, informed that a declaration under IDS, 2016 was made in respect of long-term capital gain arising on sale of shares. AO after examining the documents accepted the same and made no addition. Merely for the reason that AO took a plausible view after examining the records that was not acceptable to the Pr.CIT, would not make the assessment order erroneous.