Reassessment based on broker register failed because disconnected asking-rate entries did not evidence undisclosed land-purchase payments.

A reassessment notice based solely on a broker's seized inquiry-register entry alleging on-money payment for land purchase was unsustainable where the entry pre-dated the registered transaction, recorded asking rates rather than concluded sales, and did not identify or link the assessee or co-purchasers. Matching survey numbers alone did not establish a live and direct nexus between the seized material and the assessee's transaction. The statutory presumption for seized material could not transform a disconnected and unreliable entry into evidence of undisclosed payment. The notice under Section 148 was quashed.

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Issues: Whether a notice for reassessment could be sustained solely on a broker's seized inquiry-register entry allegedly indicating on-money payment by the assessee for purchase of land.

Analysis: The register entry pre-dated the registered purchase by approximately five months and was found to record asking rates of land available for sale, rather than concluded transactions. The entry neither named nor otherwise linked the assessee or its co-purchasers; the name recorded was of another person from whom no inquiry was made. The searched broker's statements also showed that register entries could concern clients' documents and ordinarily reflected the owner or listing person. Mere matching survey numbers, without a live and direct nexus between the seized material and the assessee's transaction, did not constitute reliable information suggesting escapement of income. The statutory presumption relating to seized material could not convert such a disconnected and infirm entry into evidence of an undisclosed payment.

Conclusion: The reassessment notice under Section 148 of the Income-tax Act, 1961 was unsustainable and was quashed in favour of the assessee.

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