Escaped income threshold requires deduction of acquisition cost before reopening; gross conveyance value alone cannot sustain reassessment.

For reassessment based on escaped income, the statutory threshold under the Income-tax Act must be tested on the net amount after deducting the cost of acquisition, and the gross figure in a registered conveyance cannot by itself justify reopening. Applying that principle, the Revenue could not treat the full sale consideration as escaped income crossing the statutory ceiling, so the notices under sections 148A(d) and 148 were unsustainable. The challenge to the order setting them aside failed, and the relief granted to the assessee was sustained.

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Issues: Whether reassessment proceedings under the Income-tax Act, 1961 could be sustained by treating the full amount mentioned in the registered conveyance as escaped income without deducting the cost of acquisition, and whether the notices under sections 148A(d) and 148 were rightly set aside.

Analysis: The reassessment threshold under section 149 depends on the quantum of escaped income. In determining that quantum, the amount stated in the registered conveyance cannot be taken in isolation without deducting the cost of acquisition. On that approach, the figure relied on by the Revenue could not be straightaway treated as escaped income crossing the statutory ceiling. The view taken by the Single Judge was found consistent with the earlier appellate view relied on by the assessee.

Conclusion: The challenge to the setting aside of the notice and the order failed, and the reopening was held unsustainable.

Final Conclusion: The appeal was dismissed and the relief granted to the assessee was sustained.

Ratio Decidendi: For reassessment based on escaped income, the statutory threshold must be tested on the net amount after deducting the cost of acquisition, and the gross figure in a conveyance deed cannot by itself justify reopening.

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