Borrowed satisfaction cannot sustain reassessment; unexplained investment needs proof of actual cash payment and timing.

Reassessment under section 147 must rest on the Assessing Officer's own belief based on tangible material, not borrowed satisfaction from another officer or uncorroborated third-party information. Where the reasons do not show a direct nexus between the material and the alleged escapement, reopening is invalid. An addition for unexplained investment likewise cannot stand without evidence of the assessee's actual cash payment, the quantum involved, and the year or mode of payment. In the absence of direct or corroborative evidence linking the assessee to alleged on-money, the reassessment and related addition were held unsustainable and the Revenue's appeals failed.

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Issues: (i) Whether the reopening of the assessment under section 147 was valid when it was based on information received from another Assessing Officer and lacked independent material linking the assessee to the alleged on-money payment. (ii) Whether the addition made towards unexplained investment could survive in the absence of evidence showing the quantum, timing, and mode of cash payment by the assessee.

Issue (i): Whether the reopening of the assessment under section 147 was valid when it was based on information received from another Assessing Officer and lacked independent material linking the assessee to the alleged on-money payment.

Analysis: Reopening after processing under section 143(1) still requires the Assessing Officer to form his own belief, on the basis of material on record, that income has escaped assessment and, where reopening is beyond four years, that such escapement resulted from failure to disclose fully and truly all material facts. The reasons recorded must disclose a clear and direct nexus between the material relied upon and the conclusion reached. On the facts, the reassessment was initiated solely on the basis of a letter from another officer and the alleged confession of a third party, without independent material showing how and when the assessee paid any cash. This amounted to borrowed satisfaction and did not meet the statutory standard for reopening.

Conclusion: The reopening under section 147 was held to be invalid and was against the Revenue.

Issue (ii): Whether the addition made towards unexplained investment could survive in the absence of evidence showing the quantum, timing, and mode of cash payment by the assessee.

Analysis: The assessee had disclosed the registered consideration and explained the cheque payments. The Assessing Officer brought no evidence to establish actual cash payment by the assessee, nor any material to show the year in which such alleged investment was made. The addition was made by apportioning an assumed cash component across assessment years without evidentiary basis. In the absence of direct or corroborative evidence linking the assessee to the alleged on-money payment, the addition could not be sustained.

Conclusion: The addition towards unexplained investment was not sustainable and was against the Revenue.

Final Conclusion: The appellate order deleting the reassessment and the related addition was upheld, and the Revenue's appeals were rejected in entirety.

Ratio Decidendi: Reassessment cannot rest on borrowed satisfaction or uncorroborated third-party information; the Assessing Officer must record independent reasons based on tangible material establishing escapement of income and, where the addition concerns investment, must prove the actual investment with evidence of amount and year of payment.

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