Reassessment based on uncorroborated information was quashed for lack of tangible material linking alleged income to the assessee.

Reassessment under sections 147 and 148 was held invalid where the alleged escapement was not supported by tangible material or any live link connecting the information to the assessee. The assessee denied receipt of the amount and supported that denial with bank evidence, while the record did not establish receipt or any substantive basis for reopening. As the foundation for reassessment failed, the reassessment proceedings were quashed and the addition made in the reassessment order also fell.

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Issues: Whether the reassessment proceedings initiated under sections 147 and 148 of the Income-tax Act, 1961 were valid when the alleged escapement was not supported by any tangible material or live link to the assessee.

Analysis: The assessee consistently denied receipt of the alleged amount and supported the denial with bank evidence. The material on record did not establish receipt of the sum by the assessee, and the reopening was therefore not founded on any substantive basis connecting the information to escapement of income. In these circumstances, the foundation for reopening failed and the assessment framed in reassessment also could not stand.

Conclusion: The reassessment proceedings were invalid and were quashed. The addition made in the reassessment order also fell with the quashing of the proceedings.

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