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2019 (3) TMI 478 - AT - Income TaxRevision u/s 263 - AO taxed sale of land partly as capital gain and partly as unexplained cash credit u/s.68- CIT directed to tax total as capital gain and allow exemption u/s.54F in respect of one flat - assessment order passed pursuant to the revisionary order has resulted in reduction of tax liability - whether the original assessment order can be considered as not prejudicial to the interest of the Revenue? - HELD THAT:- Where the AO adopted one of several courses permissible in law or where two views are possible and the AO has adopted one with which the CIT does not agree, the order cannot be treated as erroneous as well as prejudicial to the interest of the Revenue unless a view taken is unsustainable in law. In a present case it is seen that the amount of tax determined pursuant to the revisionary order has been computed at ₹ 84.26 lakh, which is lower than the amount of tax computed pursuant to the original assessment u/s.143(3) at ₹ 95.57 lakh. Section 263 empowers the Commissioner of Income-tax to revise an assessment order which is erroneous as well as prejudicial to the interest of the Revenue. It is trite law that the revisionary power can be exercised only when the assessment order passed by the AO is both erroneous as well as prejudicial to the interest of the Revenue. If one of the two conditions is not satisfied, the power to revise is ousted. Here is a case in which the assessment order passed pursuant to the revisionary order has resulted in total tax liability of the assessee at ₹ 84.26 lakh, which is less than the amount of tax originally determined as payable at ₹ 95.57 lakh, which order became subject matter of revision by the ld. Pr. CIT. We find that the Department, by virtue of the revisionary order, is losing tax lawfully payable by the assessee. That being the position, the assessment order cannot be considered as prejudicial to the interests of the Revenue. Since the assessment order does not suffer from the second infirmity namely “prejudicial to the interest of the Revenue”, we hold that the revisionary power u/s.263 cannot be exercised as both the limbs of an order, being, erroneous and prejudicial to the interest of the Revenue are not cumulatively satisfied. We, therefore, set-aside the impugned order. - Decided in favour of assessee.
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