Reassessment on fresh information failed where the later appellate view only reversed an earlier factual conclusion already considered.

Reassessment under section 34 of the Income-tax Act, 1922 required definite information revealing escaped income; a later appellate view on the same facts already considered by the Income-tax Officer was not fresh information. The original assessment had already addressed the factual question whether the cotton business profits belonged to the assessee, so the Tribunal's reversal only displaced an earlier mistaken conclusion and did not furnish new material. On that basis, initiation of proceedings under section 34 was invalid and the issue was answered against the Revenue and in favour of the assessee.

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Issues: Whether assessment proceedings under section 34 of the Income-tax Act, 1922 were validly initiated on the basis of the Appellate Tribunal's order reversing the earlier view on the same factual question.

Analysis: The relevant test under section 34 was whether the Income-tax Officer had obtained definite information leading to the discovery of escaped income. A mere different view taken by a competent appellate authority on the same facts already within the Income-tax Officer's knowledge did not amount to fresh information. The assessment in question turned entirely on a factual issue as to whose income the cotton business profits were, and the Income-tax Officer had already applied his mind to that issue in the original assessment. The subsequent appellate decision merely displaced his earlier erroneous conclusion; it did not supply new material or new information.

Conclusion: The proceedings under section 34 were not validly initiated and the question was answered in the negative, in favour of the assessee.

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