This appeal by assessee is directed against order of Commissioner (Appeals) for assessment year 1981-82. assessee is individual and his accounting year ends on 31-3-1981. He had filed his original return showing income of Rs. 11,500 and assessment was made at same figure on 12-11-1981. On 17-11-1981 Income-tax Department had sealed warehouse at Tank Bunder, Darukhana, Bombay where 22 m. tonnes of CRCA sheets were kept. These sheets were said to belong to four persons and one-fourth share belonged to assessee. assessee wrote to Commissioner stating that cost of above stock at Rs. 1,06,700 had been acquired in that very year and assessee offered to pay tax for this amount for accounting period ending on 31-3-1982 relevant for assessment year 1982-83. affidavit to this effect was also filed and assessee paid advance tax in respect of this investment. 2. In course of his inquiry ITO had summoned assessee on 22- 10-1982 and then for 26-10-1982. According to assessee, he appeared before ITO on 26-10-1982 at 2 p.m. but ITO called him for recording his statement at 6 p.m. In course of statement assessee had stated that he had appeared few days earlier also and on that day he was waiting for quite some time. He stated that he was tired. When asked about source of purchase of 22 m. tonnes of stock assessee stated that it was purchased out of savings. In reply to one question, he said that on 1-4-1982 amount of savings was Rs. 1,40,000. assessee had also stated that besides amount of Rs. 35,000 which was invested with Avinash Udyog balance was held as cash. assessee had also stated that he had advanced amount of Rs. 1,10,000 to Shri Bhajan Lal in beginning of September 1981 in cash. In reply to another question, he said that money was unaccounted and, therefore, all transactions were in cash. Towards end of his statement assessee was asked as to whether this money was held by him on 31-3-1981 and assessee replied that on that date also this was held by him. After recording of his statement on 26-10-1982, ITO issued notice under section 148 of Income-tax Act, 1961 ('the Act') for assessment year 1981-82. It is in response to this notice that under section 148 proceedings started again and reassessment was made. On 30-11-1982 assessee filed affidavit before ITO stating that statement recorded on 26-10-1982 was in spite of protest lodged by him on ground that he was tired and had been waiting for quite some time. He stated that he was examined under great stress. assessee had also made request to Commissioner stating above facts and alleging harassment. It was also stated that assessee had paid advance tax in respect of stock seized on basis of understanding with authorities and whole investment having been made in year relevant to assessment year 1982-83 amount should be assessed on basis of investment. He also requested for transfer of his case from particular ITO. 3. While making assessment for assessment year 1981-82 ITO acted on basis of assessee's statement that cash of Rs. 1,40,000 was held by him on 31-3-1981. On this basis he held that Rs. 37,000 was held with Avinash Co. and Rs. 2,500 was shown as cash in hand and balance of Rs. 1,00,500 remained unexplained. This was added as assessee's income to originally assessed income at Rs. 11,500. 4. To complete history of case, it may be mentioned that for assessment year 1982-83 assessee had filed return showing income of Rs. 1,12,063 which included investment of Rs. 1,06,700 in stock which had been sealed by Income-tax Department. While ITO did not accept plea of assessee that this income was to be assessed in assessment year 1982-83, he added this income for that year on protective basis. In this connection, he referred to fact that for assessment year 1981-1982 unexplained cash had already been added as assessee's income. 5. When matter came before Commissioner (Appeals), assessee had challenged validity of reassessment proceedings as well as addition, made in assessment. According to assessee, there was no basis for ITO to believe that assessee's income had escaped assessment for this year as assessee had already stated that amount in question was assessable in assessment year 1982-83 and for that purpose assessee had not only written to Commissioner but had also paid advance tax. It was also submitted that ITO could not reopen assessment merely on basis of statement extracted from assessee when assessee was not in proper frame of mind and had requested for not being examined so late in evening. Commissioner (Appeals), however, was of view that reopening of assessment could be justified on basis of assessee's own statement and as assessee had admitted existence of mind on 31-3-1981 amount had rightly been added by ITO. 6. Before us assessee has challenged order of Commissioner (Appeals) on ground of validity of reopening of assessment as well as correctness of addition in assessment year 1981-82. It was stated that assessment had been reopened on basis of answer to one question only and statements had been recorded against wishes of assessee when he was completely tired and could not appreciate what he was saying. It was further submitted that from statement itself ITO could not have come to conclusion that money in question pertained to assessment year 1981-82 as there was also possibility of money having been saved over number of years. He referred to provisions of sections 68, 69, 69A and 69B of Act and pointed out that there was no basis for ITO t o have reason to believe that income relating to this year had escaped assessment when assessee had already made statement saying that income related to year 1982-83 and assessee had even paid advance tax regarding same. On merits it was submitted that learned Commissioner (Appeals) has himself observed that there was no proof about source of Rs. 1,40,000 in relevant period but he chose to rely on statement of assessee recorded out of conduct. It was contended that amount in question has been taxed in year 1982-83 also though on protective basis and no appeal had been filed by assessee against that assessment as assessee was all through contending that money in question was undisclosed income of year ending March 1982. It was also submitted that there was confusion about dates and statement of assessee should have been appreciated in light of later clarification given by assessee and submission of assessee that statement had been recorded under great stress. He contended that there was no evidence with ITO to show that this money came in possession of assessee in year ending 31-3-1981 and reliance on stray statement by assessee was not only incorrect but also unfair. It was, therefore, contended that reassessment proceeding should be held to be invalid and in alternative addition made should be deleted and finding should be given that amount was correctly assessable in assessment year 1982-83 only. 7. departmental representative laid stress on factual aspects as given in order of ITO and in order of Commissioner (Appeals). He referred to statement of assessee and submitted that this question put by ITO was very clear and assessee had clearly stated that he was in possession of Rs. 1,40,000 on 31-3-1981. He contended that on basis of this admission by assessee, assessment could not only be reopened but addition could also be rightly made. 8. We have considered facts of case and arguments advanced by representatives of both sides. There are two issues to be decided by us. One relates to validity of reassessment proceedings and other relates to addition made by ITO. From facts given in beginning of this order it would appear that ITO recorded statement of assessee on 26-10-1982 and notice under section 148 was issued on 27-10-1982. Thus, reopening of assessment was based on inference which ITO drew from some of replies given by assessee in course of his statement. While few questions related to source of investment in stock, ITO had also asked some questions which were replied by saying that on 31-3-1981 also assessee held amount of Rs. 1,40,000. It is on basis of this statement alone that ITO has initiated proceedings under section 148 in order to assess this amount in year 1981-82. It was with reference to this cash holding that later investment was explained and, therefore, ITO wanted to take action for year 1981-82 to assess amount on basis of admitted cash. main objection of assessee for reopening of assessment was that statement had been recorded in atmosphere of harassment and assessee was tired by long waiting and he should have been examined on another date. It was pointed out that there was no justification for examining him after normal office hours were over at 6 p.m. It was also stated that there were other answers given by assessee 6 p.m. It was also stated that there were other answers given by assessee which showed some confusion about matter. It was also pointed out that according to statement, amount of Rs. 1,10,000 had been given to Shri Bhajan Lal in September 1981. few days after statement was recorded assessee objected to validity of statement and had also filed affidavit before ITO stating that statement had wrongly been recorded. We have, however, to consider whether for purpose of reopening of assessment under section 148 ITO could have prima facie belief that at end of financial year ending on 31-3-1981 assessee had amount of Rs. 1,40,000. This information did flow from answer given by assessee to last question put by ITO. It was only after few days that assessee came forward to deny correctness of statement and also recording his objection to manner in which statement had been recorded. On date when notice under section 148 was issued it cannot be held that ITO did not have reason to believe that there was escapement of income for assessment year 1981-82. For purpose of reopening of assessment belief of ITO not only be prima facie but be bona fide belief. It is not necessary that ITO should come to definite finding that there was some income which was actually chargeable to tax in particular year. On basis of statement inference of ITO that there was prima facie material to suggest existence of cash as on 31-3-1981 could not be said to be illusory. This cash was admittedly not shown in original statement filed by assessee. In such circumstances, reopening of assessment under section 147(a) of Act has to be upheld. 9. Having upheld validity of reopening of proceedings, we have t o consider whether in view of materials on record ITO was justified in adding any amount in assessment for assessment year 1981-82 merely on basis of statement or answers to some questions put to assessee. I t is admitted position that thing which started proceedings was discovery of stocks which had been stated to be acquired by assessee in accounting period ending on 31-3-1982. At time of discovery of stock assessee had stated that he was not in position to explain source of this stock and it may be treated as his income from undisclosed sources and should be assessed in assessment year 1982-83. For this he paid advance tax also. Thus, according to assessee, his case was covered under section 69B. It is question of fact as to when and from what source investment was made. making of actual investment is established fact but there may be materials on record which may establish that money from which such investment is made was acquired by assessee in earlier year. Section 69A requires that where assessee is found to be owner of any money and his explanation about same is not found to be satisfactory, money may be deemed to be income of assessee for such financial year. Now requirement of law is that ITO must find assessee to be owner of money in particular financial year. Here ITO is basing his inference merely on statement made by assessee and that too with reference to only one reply given by him. later statement made by assessee could not be ignored and all materials which were on record have to be considered before ITO can be said to have found assessee to be owner of money for such financial year. provisions of section 69A were invoked whereas provisions of sections 69 which were invoked for 1982-83 provides that where assessee makes investment which are not recorded in books of account and explanation offered is not satisfactory value of investment may be deemed to be income of assessee for such financial year. Before ITO decides to assess deemed income on basis of investment or finding of cash it has to be clearly established as to which provision was applicable in case. In our opinion though statement made by assessee could give to ITO prima facie belief for purpose of reopening of assessment, it was not enough for adding amount as cash available on 31-3-1981. For this it was necessary for ITO to indicate that either cash was earned in that year or there was definite material to show that it was available to assessee. For example, if there was deposit by assessee with any other person and evidence was brought about such deposit on earlier date, and there was evidence to show about return of deposit, one may come to reasonable conclusion that assessee was having cash on that date. There was no such material in present case. It was necessary for ITO that after assessee had challenged correctness of his own statement, he should have been examined afresh and clear questions should have been put to him about availability of cash, acquisition of stocks, etc., which may throw light as to when amount in question first surfaces for purpose of assessment. There is force in assessee's argument that when stock was found there was some sort of agreement that investment was to be assessed at appropriate time and assessee had to pay advance tax also for that. This was, however, not conclusive. There could be material to show that amount shown to have been invested was actually in possession of assessee on earlier date. In circumstances of present case, ITO should not have merely relied on one answer given by assessee to come to conclusion that amount in question was held by assessee as on 31-3-1981. We find that some protective assessments had been made for assessment year 1982-83 as well. addition made in this year and year 1982-83 cannot stand simultaneously. In order to come to definite inference, it appears to be necessary that ITO should put it to assessee to explain source of investment and availability of cash in year in question or in earlier year. On basis of some definite information about availability of cash ITO can proceed to make assessment in accordance with law. present assessment, according to us, is not sustainable and deserves to be set aside for fresh assessment after giving opportunity to assessee to explain whole position. It will, of course, be open to ITO to put assessee's statements to test. With these directions, we set aside order of ITO and direct him to give fair opportunity to assessee about investment and availability of cash and then proceed to make assessment in accordance with law. 10. In result, for statistical purposes, appeal shall be treated as allowed. *** PRABHU DAYAL DIDWANIA v. INCOME TAX OFFICER