TMI Blog2006 (9) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... o the interests of the Revenue. The jurisdiction could be exercised if the CIT was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the CIT for exercising jurisdiction was called for or not, has to be decided having regard to a given fact situation. In the present case, the Tribunal has held that the assessee had disclosed that out of the sale consideration, a sum was to be received for the sale of permit. If that is so, there was no error in the view taken by the Assessing Officer and no case was made out for invoking jurisdiction u/s 263 of the Act. Thus, the question referred is answered against the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ains amounting to Rs. 55,006/- subject to statutory deduction and returned the same in its total income. Besides in Part III of the return, the assessee had shown a sum of Rs. 1 lakh on account of sale of permit from the Textile Commissioner in respect of 1,200 spindles and marked the same as the amount receivable on account of goodwill. The Income-tax Officer accepted the return filed by the assessee with the following observations in the relevant assessment order pertaining to profit under section 41(2) and capital gain in respect of sale of part of machinery: '...During the relevant previous year, the assessee-firm sold a part of the machinery and thereon earned profit under section 41(2) as well as capital gains. After examining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified that a sum of Rs. 1 lakh was consideration for the permit for 1,200 spindles. 5. On the other hand, learned counsel for the assessee submitted that as per statement of case itself, the assessee had sold the permit in respect of 1,200 spindles also and in Part III of the return, a sum of Rs. 1 lakh was shown as sale of permit. 6. Learned counsel for the assessee submitted that jurisdiction under section 263 of the Act could not be exercised by the Commissioner of Income-tax, as rightly held by the Tribunal. It was submitted that the order of the Assessing Officer could not be held to be erroneous or prejudicial to the interest of the Revenue. Reliance has been placed on judgments in Jeewanlal (1929) Ltd. v. Additional CIT [1977 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the Commissioner of Income-tax for exercising jurisdiction was called for or not, has to be decided having regard to a given fact situation. 8. In the present case, the Tribunal has held that the assessee had disclosed that out of the sale consideration, a sum of Rs. 1 lakh was to be received for the sale of permit. If that is so, there was no error in the view taken by the Assessing Officer and no case was made out for invoking jurisdiction under section 263 of the Act. 9. In view of the above, the question referred is answered against the Revenue and in favour of the assessee. Reference is disp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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