High Court finds no substantial question on section 263 revision where addition lacked incriminating material

5-Second Takeaway

The High Court held that no substantial question of law arose because the issue was fully covered by the Supreme Court in Abhisar Buildwell, which was applied in favour of the assessee and against the Revenue. The revision under section 263 could not survive where the addition was made in the absence of any incriminating material.

The Revenue challenged a revisionary order under section 263 on the footing that the assessment was erroneous and prejudicial to the interests of the Revenue. The controversy centred on whether the addition sustained in the case could stand when no incriminating material had been found.

The High Court held that the point was already concluded by the Supreme Court in Principal CIT v. Abhisar Buildwell (P) Ltd. and that the same principle governed the present facts. On that basis, the Court found that the assessee was entitled to succeed on the issue.

Because the governing question stood covered by binding precedent, the Court declined to frame any substantial question of law. The Revenue’s appeals were therefore not entertained on that issue.