Reassessment cannot support a section 69A addition on a ground unrelated to the recorded reasons for reopening.

Reassessment based on alleged bogus accommodation entries of unsecured loan could not sustain an addition on a different footing under section 69A for repayment of that loan. The recorded reason for reopening did not result in any addition, while the assessment was completed on a ground wholly disconnected from the basis of initiation. Since the loan transaction itself had not been doubted in earlier years and the original reason for reassessment did not survive, the section 69A addition was deleted. The principle applied is that reassessment cannot be used to make an addition entirely unrelated to the recorded reasons for reopening.

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Issues: Whether the addition made under section 69A for repayment of an unsecured loan could be sustained when the reassessment was initiated on the basis of alleged bogus accommodation entries of unsecured loan, and no addition was ultimately made on that recorded ground.

Analysis: The reassessment was founded on information that the assessee had taken accommodation entries of bogus unsecured loan. The addition, however, was made on a different footing, namely, repayment of the loan treated as unexplained money under section 69A. The recorded reason for reopening did not culminate in any addition, and the loan transaction itself had not been doubted in earlier years. In these circumstances, the reassessment could not be used to sustain an addition wholly disconnected from the basis on which the proceedings were initiated.

Conclusion: The addition under section 69A was unsustainable and was deleted; the issue was decided in favour of the assessee.

Ratio Decidendi: In reassessment proceedings, an addition cannot be sustained on a ground entirely different from the recorded reasons where the original reason for reopening does not survive in assessment.

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