Reopening of assessment requires tangible live nexus with reasons to believe; absence of verified material quashes reassessment.

Reopening of assessment was invalid because the assessing officer lacked tangible information demonstrating a live nexus between material and the formation of belief that income escaped assessment; information from an investigation portal was not verified against assessee records and thus insufficient, so reassessment under the reasons-to-believe doctrine failed and the appeal was allowed. The addition under alleged bogus longterm capital gains was therefore not sustained due to absence of verified background material connecting the transactions to undisclosed income.

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Issues: (i) Whether the reopening of assessment by issuance of notice under section 148 is sustainable where the Assessing Officer's reasons are based on information uploaded by the Investigation Wing without corroborative tangible material connecting the information to the assessee; (ii) Whether the addition of Rs.65,24,960/- as undisclosed Long Term Capital Gain (disallowance under section 68) is sustainable where the reopening is challenged and the assessee furnished evidence of purchase and sale transactions.

Issue (i): Whether the reopening of assessment by issuance of notice under section 148 is sustainable where the Assessing Officer's reasons are based on information uploaded by the Investigation Wing without corroborative tangible material connecting the information to the assessee.

Analysis: Section 147 permits reassessment if the Assessing Officer has reasons to believe income has escaped assessment; such belief must be founded on tangible information having a live nexus with the formation of belief. The reasons recorded by the Assessing Officer relied on information from the Investigation Wing and an uploaded note, without specific factual links to the assessee's transactions (such as details of scrips, purchase consideration, payment mode, broker details or verification against assessee's records). The record shows absence of background material or cross-verification establishing a nexus between the information and the assessee.

Conclusion: The reopening of assessment under section 148 is quashed as unlawful for lack of tangible material and live nexus with the formation of belief; in favour of the assessee.

Issue (ii): Whether the addition of Rs.65,24,960/- as undisclosed Long Term Capital Gain under section 68 is sustainable where the reopening is challenged and the assessee furnished evidence of purchase and sale transactions.

Analysis: The addition under section 68 was premised on the reassessment initiated after the impugned reopening. The assessee produced evidence of purchase (account-payee cheques, STT payment, RTGS receipts) and sale through broker with corresponding receipts on record. Given the quashing of the reopening for want of requisite tangible material and nexus, the foundational basis for treating the claimed LTCG as undisclosed is removed.

Conclusion: The addition of Rs.65,24,960/- is deleted; in favour of the assessee.

Final Conclusion: The Tribunal allowed the appeal, concluding that the reassessment was invalid for lack of tangible material establishing a live nexus to form a belief that income had escaped assessment, and consequently deleted the impugned additions arising from that reassessment.

Ratio Decidendi: Reopening under section 147/148 requires tangible information having a direct/live nexus with the formation of belief that income has escaped assessment; mere information uploaded by investigative authorities without corroborative, case-specific background material is insufficient to sustain reassessment.

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