This appeal of assessee has been filed against order of CIT passed under s. 263 of Act, dt. 24th March, 2005. Briefly stated, facts of case are that appellant (AOP) came into being in year 1993 to carry on business of purchase and sale of agricultural land. It filed its return of income for this year declaring net loss of Rs. 64,298 on 26th June, 2003 in response of notice issued under s. 148 of IT Act, 1961 (hereinafter referred to as Act for short). Thereafter, income of assessee was assessed at Rs. 42,78,794 under s. 143(3)/148 vide order dt. 31st March, 2004. Against assessment order dt. 31st March, 2004, AOP has preferred appeal before learned CIT(A). Hearing of this appeal was on and during its pendency CIT issued show-cause notice under s. 263, dt. 1st March, 2005. assessee objected inter alia, that CIT s jurisdiction was ousted because of appeal before learned CIT(A) and notice under s. 263 was thus void ab initio. Before we decide real controversy, we have to cull out that first in clear- cut terms. assessee had entered into agreements to sell agricultural land to various parties and showed advance of Rs. 38,17,000 from them. learned AO had two possible views, as is evident from assessment order one he could treat this advance money of Rs. 38,17,000 as receipt in course of business or secondly he could treat this money as its undisclosed income. learned AO chose former course of action and made addition. Therefore, there is difference of opinion with regard to head of income under which this amount has to be added whether under head Business income or Income from other sources . We have heard rival submissions and perused evidence available on record. observation of learned CIT as extracted below would make it clear that learned AO had visualised and considered both above situation but had adopted one view out of two possible views. CIT has observed in last para at page No. 6 of order as under: "I have carefully considered submissions and it is clear from assessment order that AO was in dilemma and he has mentioned two contradictory things in different paras of assessment order. AO had suspicion and he had stated that it might be possible that M/s Hari Singh & Associates have used their undisclosed income and invested in purchase of land. He further stated, I am of view learned AO should have made addition of Rs. 38,17,000 considering same as undisclosed income of AOP instead of treating same as business income of assessee and to this extent order passed by AO is erroneous and requires to be set aside under s. 263 of IT Act. He continued (at page No. 7) order of AO is erroneous in treating Rs. 38.17 lakhs as business income as money received as advance cannot be treated as income. I, therefore, set aside this order passed by AO in considering Rs. 38.17 lakhs as business income whereas addition should have been (made) considering same as undisclosed income of AOP and to this extent order of AO is erroneous and is set aside, insofar as it is prejudicial to interest of Revenue. " law on this subject settled. Rather bare reading of s. 263 of Act makes it clear that twin conditions, which are prerequisites for exercise of jurisdiction under s. 263 of Act, are that order can be revised only if (1) it is erroneous, and (2) it is prejudicial to interest of Revenue to that extent. We can quote one decision of Hon ble apex Court rendered in case of Malabar Industrial Company Ltd. vs. CIT (2000) 159 CTR (SC) 1: (2000) 243 ITR 83 (SC) to make interpretation of s. 263 crystal clear. In given case, learned AO has discussed both options available before him, as discussed in impugned order itself. learned AO opted for one course of action out of two legally possible options before him. So order cannot be said to be erroneous. It may be prejudicial to interest of Revenue. Therefore, one condition of two sine qua non is missing, and which ousts jurisdiction of learned CIT. learned CIT cannot substitute his own option under s. 263 of Act. above decision of Hon ble apex Court further held that when ITO has adopted one of courses permissible in law and it has resulted in loss of revenue, or where two views are possible and ITO has taken one view with which learned CIT does not agree, it cannot be treated as erroneous order prejudicial to interest of Revenue, unless view taken by ITO is unsustainable in law. In this case AOP received as signing (advance) money of Rs. 38,17,000 for sale of agricultural land and learned AO considered same as business income and taxed same under head Income from business that is sale of agricultural land. This view of learned AO is legally permissible view. Nothing has been argued by Department that it is not legally permissible act of learned AO. Therefore, CIT did not have jurisdiction to interfere in findings of learned AO by exercising his powers under s. 263 of Act. Moreover, matter was pending in appeal before learned CIT(A) and during which revision under s. 263 has been held to be invalid (sic). following decisions support this proposition of law: Aerens Infrastructure & Technology Ltd. & Ors. vs. CIT (2004) 192 CTR (Del) 542: (2004) 271 ITR 15 (Del); CWT vs. Sampathmal Chordia, Executor in Estate of Late Neni Kavur Bai (2002) 176 CTR (Mad) 234: (2002) 256 ITR 440 (Mad). Therefore, in view of aforesaid discussion, impugned order of CIT passed under s. 263 of Act is held invalid and same is set aside being without jurisdiction. order of learned AO is upheld. order passed under s. 263 is hereby cancelled. In result, appeal is allowed. *** Harisingh & Associates (Aop) v. Income-tax Officer