Reassessment based on already available material was invalid, as reopening rested on suspicion rather than reason to believe.

Reassessment under sections 147 and 148 of the Income-tax Act was invalid because the material relied on for reopening, including the assessee's share transactions, was already available when the original assessment under section 143(3) was completed. The Tribunal found that there was no "reason to believe" that income had escaped assessment and that the reopening rested only on a mere suspicion. The appellate court found no infirmity in that finding, upheld the setting aside of the reassessment, and held that no substantial question of law arose.

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Issues: Whether the reassessment proceedings initiated under sections 147 and 148 of the Income-tax Act, 1961 were valid, and whether any substantial question of law arose from the Tribunal's finding that the reopening was based only on material already on record.

Analysis: The Tribunal had examined the record in detail and found that the information relied upon for reopening, namely the assessee's share transactions, was already available when the original assessment was completed under section 143(3) of the Income-tax Act, 1961. On that basis, the Tribunal concluded that there was no reason to believe that income had escaped assessment and that the reopening was founded only on a mere reason to suspect. The appellate court found no infirmity in that conclusion and held that the Tribunal was justified in setting aside the reassessment.

Conclusion: The reopening under sections 147 and 148 of the Income-tax Act, 1961 was held to be invalid, and no substantial question of law arose. The appeal failed.

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