The Tax Publishers2021 TaxPub(DT) 0091 (Kol-Trib)


Section 263

Where AO called for necessary details regarding source of investment in residential property purchased by assessee and the assessee replied to all such queries and after such examination and enquiry only, the AO passed the assessment order; the said order of the AO could not be held to be erroneous and prejudicial to the interest of Revenue and hence, the revision order passed under section 263 by the CIT was bad in law and accordingly, the same was liable to be quashed.

Revision under section 263 - Erroneous and prejudicial order - Due examination and enquiry conducted by AO -

Assessee purchased a residential flat. CIT observed that details of source of funds for investment in such residential house including housing loan etc. were not enquired into by AO. He further observed that during the assessment proceedings, the assessee also did not furnish date wise schedule reflecting payment of interest on loan, stamp duty/registration fees and submission regarding the source of repayment of loan/EMI along with supporting documents. Accordingly, the CIT concluded that the order passed by AO was erroneous in so far as it was prejudicial to the interest of Revenue. Held: CIT assumed his revisional jurisdiction under section 263 on the ground that the source of investment in residential property purchased by assessee, bank details, etc., were not verified by AO while framing assessment order. However, the facts on record demonstrated that the AO while framing the assessment called for various details specifically examining the source of investment of such property purchased by the assessee. Further, the assessee also furnished a letter wherein he explained each and every details of the source of investment towards purchase of the said residential flat. Therefore, it would be said that the AO duly examined all the details and thereafter framed the assessment under section 143(3). Further, the CIT had not specifically shown with evidences, the reasons why the order of the AO was erroneous and prejudicial to the interest of Revenue. Hence, the order passed under section 263 was bad in law and the same was accordingly, quashed.


FAVOUR : In assessee's favour

A.Y. : 2014-15



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