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2021 (10) TMI 1194 - AT - Income TaxRevision u/s 263 by CIT - As per CIT sale of land parcels as taxed under the head "Capital Gains" - AO found that the actual sale consideration of land parcels shown as business assets/stock-in-trade in the books of accounts is lesser than the corresponding value assessable for the purposes as stamp duty - HELD THAT:- If the course suggested by the PCIT is adopted and on profits arising on sale of land parcels are taxed under the head "Capital Gains", the assessed income could be lower than the income assessed by the AO. The tabular statement demonstrating the aforesaid fact is self-speaking in this regard and does not require much delineation. Consequently, where the course suggested by the PCIT results in greater prejudice to the Revenue and the course adopted by the AO has resulted in lesser prejudice, the action of the PCIT under Section 263 falls flat on the ground. In order to usurp jurisdiction u/s 263, both the conditions, i.e. order being erroneous as well as prejudicial to the interest of the revenue, must simultaneously coexist. In absence of any prejudice caused to the Revenue by the action of the Assessing Officer, the order cannot be revised even if it is momentarily considered to be erroneous. Hence, the revisionary action of the PCIT requires to be set aside on this ground alone without going into other aspect of arguments. We also take into account the other line of arguments propounded on behalf of the assessee that the nature and character of an income depends on host of factors which are required to be cumulatively weighed and thus is inherently a very highly subjective exercise. There is no straight jacket formula to determine whether an asset held by the assessee should be treated as capital asset or business asset. Such issues are inherently highly debatable and arguable in nature. One cannot definitely say with precision and more so under the revisional jurisdiction that the action of the AO in adopting one course of view is erroneous per se. There is invariably a scope of argument on determination of character of income. Indulgence on such aspect under the revisional jurisdiction is not appropriate in the absence of cogent facts adverse to the assessee. We do not see any such material which can make the conclusion of the PCIT indefeasible. This being so, the action of the PCIT cannot be endorsed on this ground also. Hence, looking from any angle, the revisional action of the PCIT under Section 263 is not sustainable in law. Consequently, the revisional order under Section 263 of the Act is quashed and set aside. - Decided in favour of assessee.
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