Reassessment based on borrowed satisfaction fails when scrutiny assessment already examined share capital and no fresh tangible material exists.

Reassessment under sections 147 and 148 is vulnerable where the original scrutiny assessment under section 143(3) had already examined the share capital issue and the reopening rests only on Investigation Wing information. If the recorded reasons do not show independent inquiry, fresh tangible material, or a live nexus between the material and escapement of income, the reopening is treated as borrowed satisfaction and a mere change of opinion. On that basis, the reassessment cannot be sustained and the reopening is invalid.

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Issues: Whether reopening of the assessment under sections 147 and 148 was valid when the original assessment had been completed under section 143(3), the share capital issue had already been examined, and the reopening was based on information from the Investigation Wing.

Analysis: The original assessment had been framed after scrutiny and inquiry into the share capital receipts, including verification from the share applicants. The reasons recorded for reopening were founded on information from the Investigation Wing regarding accommodation entries through the Himanshu Verma group, but the reasons did not disclose any independent inquiry or fresh tangible material linking the assessee to escapement of income. The record showed that the material regarding the search and the alleged beneficiary list was already available when the original assessment was completed. In such circumstances, reopening on the same material amounted to a mere change of opinion and reflected borrowed satisfaction rather than an independently formed belief based on a live link between material and escapement.

Conclusion: The reopening was invalid and the reassessment could not be sustained; the issue was decided in favour of the assessee.

Ratio Decidendi: Where a scrutiny assessment under section 143(3) has already examined the relevant issue, reassessment under sections 147 and 148 cannot be sustained merely on the basis of borrowed satisfaction or unverified investigation information unless the Assessing Officer records an independent belief founded on tangible material showing a live nexus with escapement of income.

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