Reassessment validity fails when reasons are borrowed from Investigation Wing material and sanction is granted mechanically.

Reassessment under Sections 147 and 148 was held invalid where the recorded reasons merely reproduced Investigation Wing information without independent verification or examination of the seized material. The reopening was based on vague references to accommodation entries and did not identify the precise alleged transaction or explain how income had escaped assessment. The sanction under Section 151 was also found to be mechanical, as the approving authority gave only a bare endorsement without meaningful consideration of the reasons. On these facts, the reassessment proceedings were quashed and the additions made therein could not be sustained.

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Issues: Whether the reassessment under Sections 147 and 148 of the Income-tax Act, 1961 was valid when the reasons recorded were based on Investigation Wing information without independent application of mind and the sanction under Section 151 of the Income-tax Act, 1961 was mechanical.

Analysis: The reasons recorded merely reproduced the Investigation Wing material and did not disclose any independent verification or examination of the seized annexures relied upon. The reassessment was founded on vague and inconsistent references to accommodation entries, without identifying the precise nature of the alleged entry or demonstrating how the material led to the belief that income had escaped assessment. The sanctioning authority's endorsement was also a bare approval, showing no meaningful consideration of the reasons. On these facts, the reopening lacked proper application of mind and the statutory approval was mechanical.

Conclusion: The reassessment proceedings were invalid and the additions made therein could not be sustained. The issue is decided in favour of the assessee.

Final Conclusion: The appellate challenge succeeded because the foundational reassessment action was vitiated for want of independent reasoning and valid sanction, resulting in quashing of the proceedings.

Ratio Decidendi: A reassessment based only on borrowed information, without independent examination of the material and with a mechanical approval under Section 151, is unsustainable in law.

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