Reassessment requires proof that the amount is income; an unexplained outstanding balance is not assessable.

A reassessment under section 34 could not be sustained unless the Revenue first established that the amount sought to be taxed was in fact the assessee's income. The record showed only an outstanding balance in the assessee's favour from an earlier period, with no finding or material explaining the liability or proving the amount's income character. On that basis, the sum could not be assessed to tax, and the question of the correct assessment year did not arise.

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Issues: Whether the sum of Rs. 15,000 could be assessed as the assessee's income for the relevant previous year and assessment year.

Analysis: A reassessment under section 34 could be made only if the amount sought to be taxed was first found as a fact to be the assessee's income. The record showed only that the amount stood as a balance in favour of the assessee from an earlier period, but there was no finding or material showing how the liability arose or that the amount represented income at all. In the absence of such a foundational finding, the amount could not be brought to tax, and the question of the correct assessment year did not arise.

Conclusion: The sum of Rs. 15,000 was not proved to be the assessee's income and was not liable to assessment to income tax.

Ratio Decidendi: A reassessment can succeed only where the Revenue first establishes that the amount sought to be taxed is income of the assessee; a mere outstanding balance without proof of its income character is not assessable.

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