The family settlement was arrived between the share holders of the Company who are family members. As per the Arbitration award the family settlement was recorded between parties. As per the family settlement the building of the company  was sold. The assessee claimed the amount paid as part of settlement  as cost of improvement while computing the capital gains. The Assessing Officer allowed the claim. Commissioner set aside the order of the Assessing Officer. On appeal the Tribunal held that the Commissioner wrongly invoked the revision Paville Projects Pvt. Ltd v. CIT    (2014)  35 ITR 352(Mum)) (Trib). Order of the Tribunal was affirmed by High Court,  CIT v. Paville Projects Pvt. Ltd  [2017] 398 ITR 603 (Bom) (HC).On appeal by the Revenue  allowing the appeal the Court held that   the erroneous assessment order had resulted in loss of revenue in the form of tax. Under the circumstances and in the facts and circumstances of the case, the High Court had committed a serious error in setting aside the order passed by the Commissioner passed in exercise of powers under section 263 of the Act.  The Court observed that if due to an erroneous order of the  Income -tax Officer, the Revenue is losing tax lawfully  payable by person, it will certainly be prejudicial to the interest of the Revenue. The order passed by the Commissioner in exercise of powers under section 263 of the Act was  restored.(AY. 2007-08)