Reassessment must match the recorded reason; a different disallowance could not survive when no addition arose on reopening grounds.

Reassessment under section 147 must remain linked to the recorded reason for reopening; if no addition is made on that issue, a disallowance on a different issue cannot survive. Here, reopening was based on alleged understatement of sale consideration for capital gains, but the Assessing Officer made no addition on that recorded ground and instead disallowed the section 54 deduction. The disallowance was therefore unsustainable and was deleted, with the challenge to the reassessment succeeding.

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Issues: Whether an addition made in reassessment proceedings can be sustained when no addition is made on the issue for which the reassessment was initiated.

Analysis: Reassessment was initiated on the basis of alleged understatement of sale consideration for capital gains purposes. No addition, however, was made on that recorded reason, and the Assessing Officer instead disallowed the deduction claimed under section 54 of the Income-tax Act, 1961. Following the principle that the jurisdiction assumed under section 147 must be linked to the issue recorded for reopening, and that no other addition can survive where the recorded reason does not result in any addition, the disallowance made on a different issue could not be sustained.

Conclusion: The addition was deleted and the legal ground challenging the reassessment succeeded.

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