Reassessment on borrowed satisfaction and wrong facts was held invalid for lack of live nexus with income escapement.

Reassessment jurisdiction requires tangible material on correct facts showing a live nexus with escapement of income; reopening based on survey material concerning third parties, alleged accommodation entries, and assumptions unsupported by the record is invalid. The recorded reasons showed no independent application of mind by the AO and relied on incorrect factual assumptions about the alleged loans, so the reopening was bad in law for both assessment years.

---

---

Issues: Whether the reopening of assessment for Assessment Years 2014-15 and 2015-16 was valid in law.

Analysis: The reasons recorded for reopening were founded on survey information relating to alleged unaccounted marriage expenses of third parties and on an assumption that the assessee had taken accommodation entries by way of unsecured loans. The recorded reasons did not establish any live link between the survey material and escapement of income in the assessee's hands. The factual basis in the reasons was also incorrect, since the loans were stated to be outstanding for more than six years although the record showed repayment in the same or succeeding year. The material disclosed no independent application of mind by the Assessing Officer and no tangible material supporting the conclusion that income had escaped assessment. The reopening was therefore based on borrowed satisfaction and on wrong facts.

Conclusion: The reopening of assessment was invalid and bad in law for both assessment years.

Ratio Decidendi: Reassessment jurisdiction can be assumed only on correct facts supported by tangible material showing a live nexus with escapement of income, and a notice based on borrowed satisfaction or incorrect factual assumptions is without authority of law.

---