Reassessment based on tangible third-party material and seized sale evidence sustained; cash consideration taxed in the effective owner's hands.

Reassessment was sustained where tangible information from the Investigation Wing provided a live link to alleged escaped income, and the proviso to section 147 was held not to bar reopening of a third party on the basis of material gathered in another case. The approval for notice under section 148 was treated as a conscious exercise of power, and the absence of a request for recorded reasons meant non-supply did not vitiate the proceedings. On merits, the assessee was treated as the effective owner of the property, the seized document was accepted as reliable evidence corroborated by surrounding circumstances and the statutory presumption under section 292C, and the cash component was upheld as unexplained sale consideration in the assessee's hands.

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Issues: (i) Whether the reassessment was invalid for want of sufficient reasons to believe and for alleged bar under the proviso to section 147; (ii) Whether the approval for issue of notice under section 148 and the non-supply of reasons vitiated the reassessment; (iii) Whether the cash component of the sale consideration and the alleged denial of cross-examination justified the addition in the assessee's hands.

Issue (i): Whether the reassessment was invalid for want of sufficient reasons to believe and for alleged bar under the proviso to section 147.

Analysis: The reopening was founded on information received from the Investigation Wing that the property transaction involved cheque and cash components and that the assessee had executed the transaction. The third proviso to section 147 was held to restrict reassessment only where the income involving the issue is the subject matter of appeal, reference, or revision in the same assessee's case, and not to bar reopening of a third party on the basis of information gathered in another case. The recorded material was held sufficient to form a bona fide belief that income had escaped assessment.

Conclusion: The reassessment was held to be valid, against the assessee.

Issue (ii): Whether the approval for issue of notice under section 148 and the non-supply of reasons vitiated the reassessment.

Analysis: The sanctioning authority expressly recorded satisfaction that it was a fit case for issue of notice under section 148. That approval was held to be a conscious exercise of power and not mechanical. It was also held that, where the assessee never sought a copy of the recorded reasons, the assessing officer could not be faulted for not supplying them before completion of assessment.

Conclusion: The challenge to the notice and sanction failed, against the assessee.

Issue (iii): Whether the cash component of the sale consideration and the alleged denial of cross-examination justified the addition in the assessee's hands.

Analysis: On the facts, the assessee was treated as the effective owner of the property by virtue of the agreement to transfer and assign, and the subsequent assignment-cum-sale recitals supported that position. The seized paper recovered from the buyer's premises was held to be a reliable evidentiary document, not a dumb document, and the statutory presumption under section 292C supported its contents. The document, read with the buyer's own stand in its proceedings, showed that the transaction involved both cheque and cash components. The allegation of violation of natural justice was rejected as no request for cross-examination had been shown.

Conclusion: The addition of the cash component as unexplained sale consideration in the assessee's hands was upheld, against the assessee.

Final Conclusion: The assessee failed on both jurisdictional and merits challenges, and the addition made in respect of the property transaction was sustained.

Ratio Decidendi: Where reassessment is supported by tangible information giving rise to a nexus with escaped income, approval under section 151 is expressly recorded, and seized material from the transaction counterparty is corroborated by surrounding circumstances, the cash component of undisclosed sale consideration can be assessed in the hands of the person found to be the effective owner of the property.

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