2012 (3) TMI 227 - DELHI HIGH COURT

Validity of revisionary powers exercised by Commissioner u/s 263 on ground that A.O. has not examined aspect of full value of consideration and that high-yielding asset could not be disposed off at such a low value – assessee claimed long-term capital loss on sale of immovable property in year 2003 for 70 lacs, purchased in year 1997 for 69.63 lacs - Held that:- A.O. is both an investigator and an adjudicator. If the A.O. fails to conduct enquiry, he commits an error and the word 'erroneous' includes failure to make the enquiry. In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/inquiry made is erroneous. An order is not erroneous and prejudicial to the interest of Revenue, unless the CIT hold and records reasons why it is erroneous.

Therefore, we upheld the order of Tribunal setting aside the order of CIT since CIT has not examined the said aspect himself and has not given any finding/reason for observing that the order passed by the A.O. was erroneous – Decided against the Revenue.