Reassessment requires tangible material linked to the assessee; unrelated third-party information cannot justify reopening.

Reassessment under section 147 is valid only where the recorded reasons rest on relevant, tangible material with a live link to the assessee's alleged escapement of income. Here, the reopening was based on penny stock and accommodation-entry information that related to another person, while the assessee's own return, audit report, computation, and profit and loss account showed no such share transactions or capital gain. Because the recorded reasons did not establish that the assessee had entered the cited transactions and lacked a proper nexus with the assessee's records, the jurisdictional for reopening was not satisfied. The reassessment was therefore quashed and the additions became academic.

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Issues: Whether the reassessment proceedings initiated under section 147 were valid when the recorded reasons related to transactions not belonging to the assessee and lacked tangible material linking the assessee to escapement of income.

Analysis: The reassessment was founded on information concerning penny stock transactions and alleged accommodation entries, but the assessee's return, computation of income, tax audit report, and profit and loss account did not show any long-term capital gain or the impugned share transactions. The reasons recorded did not establish that the assessee had actually entered into the cited transactions; instead, the material related to the assessee's client. For reopening, the Assessing Officer must have reason to believe based on relevant, live, and tangible material, and not on vague, remote, or unrelated information. Since the recorded reasons lacked a proper nexus with the assessee and reflected no application of mind to the assessee's own records, the jurisdictional condition for reopening was not satisfied.

Conclusion: The reassessment proceedings were invalid and were quashed in favour of the assessee.

Final Conclusion: The appeal succeeded because the foundational requirement for reopening was not met, and the merits of the additions became academic.

Ratio Decidendi: Reassessment under section 147 can be sustained only when the recorded reasons are based on relevant tangible material having a live link with the assessee's alleged escapement of income; information relating to another person or unsupported assumptions cannot confer jurisdiction.

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