Reassessment and unexplained investment fail where reopening material is withheld and property payments are fully backed by banking records.

Reassessment cannot be sustained where the reopening is based on unverified investigation material that is not furnished to the assessee despite request, because such denial breaches natural justice and undermines the formation of a valid belief. An addition for unexplained investment under section 69B also fails where the purchase consideration is shown through account payee banking channels and is supported by ledger entries, receipts, confirmations, bank statements, and the seller's records. On the stated facts, the investment was treated as duly recorded and explained, and the addition was deleted.

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Issues: (i) Whether the reassessment proceedings were vitiated for want of proper basis and for non-furnishing of the material relied upon for reopening, and (ii) whether addition made as unexplained investment under section 69B could be sustained when the purchase consideration was shown to have been paid through banking channels and duly recorded.

Issue (i): Whether the reassessment proceedings were vitiated for want of proper basis and for non-furnishing of the material relied upon for reopening.

Analysis: The reopening was founded on information received from the investigation wing and the Assessing Officer's view that the investment was disproportionate to the returned income. The record showed that the investigation report relied upon for reopening was not furnished to the assessee despite request. The reassessment was therefore initiated on material that was not independently verified in the manner required for a valid formation of belief, and the denial of the underlying report resulted in a breach of natural justice.

Conclusion: The reassessment proceedings were held invalid and the challenge of the revenue on this aspect failed.

Issue (ii): Whether addition made as unexplained investment under section 69B could be sustained when the purchase consideration was shown to have been paid through banking channels and duly recorded.

Analysis: The appellate record showed that the property consideration was paid in tranches over different years through account payee banking channels and was supported by ledger entries, receipts, confirmations, bank statements, and the seller's records. On those facts, there was no basis to treat the investment as unrecorded or unexplained. Since section 69B applies to amounts not recorded or not satisfactorily explained, the addition could not be sustained on the material available.

Conclusion: The addition under section 69B was not sustainable and its deletion was upheld.

Final Conclusion: The revenue's challenge to both the reopening and the addition failed, and the assessee succeeded in retaining relief granted by the first appellate authority.

Ratio Decidendi: Reassessment must rest on a bona fide and verifiable belief supported by material, and an addition for unexplained investment cannot stand where the investment is shown by contemporaneous banking and record evidence to be duly recorded and explained.

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