Reassessment income computation must match assessed income when no addition is made on the reopened issue

In reassessment proceedings, where the assessment order accepted the assessee's explanation for cash deposits and made no addition on the reopened issue, tax computation had to conform to the income actually assessed. The Tribunal held that the Revenue could not adopt an income figure different from the assessed income in the absence of a corresponding addition. The first appellate authority's order was therefore affirmed, and the Revenue's appeal failed.

---

---

Issues: Whether the Revenue could sustain computation of tax at an income different from the income assessed in the reassessment order when no addition was made on the issue for which the assessment was reopened.

Analysis: The reassessment was initiated on account of cash deposits in the assessee's bank account. In the assessment order, the explanation furnished by the assessee was accepted and no addition was made. The resulting computation, however, adopted an income figure different from the income actually assessed. Where the assessment order itself contains no addition and accepts the assessee's explanation, the tax computation cannot travel beyond the assessed income.

Conclusion: The computation at an income different from the income assessed was not justified, and the assessee succeeded on this issue.

Final Conclusion: The order of the first appellate authority was affirmed and the Revenue's appeal failed.

Ratio Decidendi: In reassessment proceedings, where no addition is made in the assessment order and the assessee's explanation is accepted, the computation of tax must conform to the income actually assessed and cannot be made on a higher or different figure without a corresponding addition.

---