P.N. PARASHAR, J.M. This appeal has been filed by assessee against order of learned CIT(A) in Appeal No. 16/2001-02, dt. 17th May, 2001, for asst. yr. 1994-95. assessee has taken following grounds in this appeal : 1. Learned CIT(A) is not justified in upholding addition worth Rs. 1,26,000 on account of loan from Digvijay Singh. 2. Learned CIT(A) is not justified in upholding addition worth Rs. 4,67,600 on account of loan from Late Sh. I.B. Singh. 3. Learned CIT(A) is not justified in estimating drawing at Rs. 50,000 onad hocbasis. 2 . During course of hearing, videapplication dt. 17th Jan., 2005, assessee made prayer for admission of following additional grounds : "That initiation of proceedings under s. 147 of IT Act was wholly without justification, as there was no material for reason to believe that income of assessee had escaped assessment." 3 . After hearing parties, Bench admitted this ground videorder dt. 24th May, 2005. 4. arguments of parties were heard on additional grounds and also on original grounds on 24th May, 2005. At time of hearing, Bench directed learned Departmental Representative to file copy of order of ITO regarding reasons recorded for opening of assessment and for issuing notice under s. 148 of IT Act. learned senior Departmental Representative vide application dt. 1st July, 2005, filed letter of Enforcement Directorate dt. 9th Oct., 1998 along with copy of order dt. 31st March, 1999 recording reasons for issuing notice under s. 148 of IT Act. In view of these, subsequent developments and for providing opportunities to assessee for rebutting these documents, matter was again heard on 15th July, 2005. learned representatives of both parties have submitted arguments in relation to additional ground reproduced above and have supported their arguments by making reference to various authorities. 5. We, therefore, considered it proper to dispose of additional ground taken by assessee in this appeal, which challenges validity of notice issued under s. 148 of IT Act. However, before taking up arguments of parties on this issue, we want to narrate relevant facts regarding reopening of assessment which are as under : (i) assessee filed return on 30th March, 1996 declaring total income of Rs. 41,200 for asst. yr. 1994-95. This return was processed under s. 143(1)(a) on 28th June, 1996. (ii) Enforcement Directorate wrote letter dt. 9th Oct., 1998 to Jt. Secretary, Foreign Tax Division, CBDT, which is as under : "Ref. No. T-3/84-D/ 97 Dt. 9-10-1998 Jt. Secretary, Foreign Tax Division, CBDT, Department of Revenue, North Block. New Delhi. Sir, Sub. : Enquiries regarding fixed deposits in name of Shri Awaninder Singh, Passport No. L-524965 and Smt. Poonam Rani Singh Passport No. R- 769566 resident of A-2/177, Safdarjung Enclave, New Delhi-110029 with Wells Fargo Bank, 1705, North First Street, San Jose, CA 95112, USA. We are conducting certain enquiries against subject parties under provisions of Foreign Exchange Regulation Act, 1 97 3. We are in possession of two certificates of Deposits of US $ 1,00,000 each issued by Wells Fargo Bank, 1705, North First Street, San Jose, CA 95112, USA in name of captioned parties. These deposits appear to have been made in June, 1996 which coincide with dates during which Shri Awaninder Singh and his wife Smt. Poonam Rani Singh were also in U.S.A. You are requested to make overseas enquiries on following : 1. Dates on which account was opened by Sh. Awinder Singh and his wife Smt. Poonam Rani Singh. 2. Whether amounts were deposited in cash or by cheque. If deposits were by cheque, who issued cheques and from which account and name of bank. 3. Present status of said deposits. 4. If deposits have been withdrawn, were amount has been transferred or who withdrawn money. 5. names, passport numbers and addresses of persons who are authorized to operate account. 6. Details of any other deposits or account if any, of subject party with said bank. You are also requested to collect any other information in respect of said deposits, which may be relevant for investigation under Foreign Exchange Regulation Act. copies of said two deposits certificates are also enclosed herewith. Yours faithfully, Sd/- (M.C. Joshi) Special Director Encl. : As above." (iii) On basis of said letter, AO passed order dt. 31st March, 1999, which is as under : "While dealing with information (separately placed in enquiry folder) provided by Enforcement of Directorate videtheir letter Ref. No. T-3/84-D/19 97 dt. 9th Oct., 1998 written to JS (FTD) CBDT it have been felt that assessee, is maintaining foreign accounts/deposits, which have not been reflected in returns of income of statements and accounts filed by assessee. I have, therefore, reasons to believe that assessee have sources of income outside India which have not been reflected in return and thus escaped assessment. Notice under s. 148 is, therefore, issued to bring income under tax net." (iv) assessment order has been made by AO under s. 143/147 which was passed on 31st March, 2001. It is to be pointed out that AO made various additions in assessment order dt. 21st March, 2001 which are as under : 1. Income from salary (As shown) 24,000 2. Income from other sources (As shown) 17,200 Add : (a) Unexplained loan (As discussed above in 5,93,600 para 2) (b) Unexplained gifts (As discussed above in 25,100 para 3) (c) Interest accrued on FDRs (As discussed 2,50,500 above in para 4) (d) Unexplained investment in immovable 1,58,43,057 properties (As discussed above in para 5) (e) Addition on account of low withdrawals (As 1,12,000 discussed above in para 6) Gross total income 1,68,65,457 Less : Deduction under s. 80L 12,000 1,68,53,457 Total income Or 1,68,53,460 (v) It is clear from above details that no addition has been made in assessment order on basis of any foreign account deposits. 6. In setting of above factual background, we proceed to adjudicate additional ground. learned counsel for assessee, Shri Salil Aggarwal while challenging validity of notice issued under s. 148, made following submissions : (i) That as observed by AO in reasons to be recorded, reopening was made on basis of information provided by Enforcement Directorate which was in relation to deposits by assessee in various foreign accounts and as no addition has been made on account of any deposit in foreign account in reassessment order, notice of reopening on that basis itself is illegal. (ii) That additions have been made on items, which are not mentioned in reasons recorded for issuing notice under s. 148 and thus there is no nexus between reasons recorded for reopening assessment and reassessment made. (iii) That AO cannot be allowed to travel beyond reasons recorded for making reassessment and he can make additions only in relation to ground having nexus with reasons recorded and not on totally different grounds. (iv) That AO cannot make fishing and roving enquiry during reassessment proceedings. (v) That so far as additions on account of unexplained loans, unexplained gifts and unexplained investment in immovable properties are concerned, assessee had already submitted details in balance sheet and on basis of same information, AO was not competent to reopen assessment and to make additions in assessment order passed under s. 143/147. In support of his contentions, learned counsel placed reliance on following decision : 1.Vipan Khanna vs. CIT (2002) 175 CTR (P&H) 335 : (2002) 255 ITR 220 (P&H) 2.CIT vs. MP Traders 189 ITR 154(sic) 3.CIT vs. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 2 97 (SC); 4.Jamna Lal Kabra vs. ITO (1968) 69 ITR 461 (All). (vi) That after processing return under s. 143(1)(a), AO could have issued notice under s. 143(2) and if he has not done so, he cannot be justified in taking recourse to process under s. 148/147. On basis of above averments, submissions of learned counsel was that notice issued under s. 148 is bad and illegal and assessment order framed under s. 143/147 on basis of such illegal notice is badper sein eye of law and same was required to be quashed. 7 . On other hand, learned senior Departmental Representative submitted that AO was fully justified in issuing notice on basis of information received through Enforcement Directorate and reasons recorded in reopening of assessment having been based on such information are fully justified. According to him, AO was, therefore, fully justified in forming belief that income of assessee has escaped assessment. learned Departmental Representative also submitted that intimation under s. 143(1)(a) cannot be treated as assessment as there is no application of mind by AO at that stage. He also contended that even if deposits were reflected in balance sheet of assessee filed with return, then also AO was fully authorized to examine same after reopening assessment. It was further submitted by him that assessment can be reopened on any ground if AO has belief or has reasons to believe that income of assessee has escaped assessment. According to him AO, while making assessment is not to confine to reasons recorded alone and can make additions on other items of income even if reopening has been made on different items. 8. In rejoinder, learned counsel for assessee submitted that before issuing notice under s. 148, AO should satisfy that particular income of assessee has escaped assessment and in reassessment order additions can be made only regarding such escaped income and not on totally different aspects or items of income. 9. We have carefully considered entire relevant material on record and rival submissions. following facts are found to be undisputed : (1) information of Enforcement Directorate as conveyed through letter dt. 9th Oct., 1998, reproduced above, was that there were certain certificates of deposits in foreign bank accounts in names of assessee and her husband and enquiries were initiated in relation to certificates, which were in possession of Enforcement Directorate. reasons recorded in reopening are based on this information alone. (2) In assessment order no addition has been made with regard to alleged deposits referred to which has been made in reasons recorded for reopening assessment. (3) additions have been made on other items some of which are reflected in balance sheet filed along with return of income, which was processed under s. 143(1)(a). 10. In view of above factual background, we proceed to adjudicate upon additional ground raised before us. For analytical examination of matter and for due appreciation of arguments advanced before us in relation to this ground, we consider it proper to formulate following issues : "(i) Whether AO was justified in issuing notice under s. 148 on basis of information received by him, i.e., letter dt. 9th Oct., 1998 of Enforcement Directorate, reproduced above ? (ii) Whether, while making assessment, AO can bring to charge items o f income, which had escaped assessment other than or in addition to those items on basis of which notice under s. 148 of IT Act was issued ? (iii) Whether merely because, no notice under s. 143(2) was issued by AO after issuing intimation under s. 143(1)(a), AO is not competent to initiate reassessment proceedings. If so, whether scope of inquiry in such reassessment proceedings will be limited ? (iv) Whether on facts and in circumstances of this case, order passed by AO under s. 147/143, is legally justified ? 1 1 . above issues are to be adjudicated in context of relevant provisions of s. 147 as amended w.e.f. 1st April, 1989, which are as under : "147. If AO has reason to believe that any income chargeable to tax h s escaped assessment for any assessment year, he may, subject to provisions of ss. 148 to 153, assess or reassess such income and also "any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section, or recompute loss or depreciation allowance or any other allowance, as case may be, for assessment year concerned (hereafter in this section and in ss. 148 to 153 referred to as relevant assessment year) : Explanation 1. Production before AO of account books or other evidence from which material evidence could with due diligence have been discovered by AO will not necessarily amount to disclosure within meaning of foregoing proviso. Explanation 2. For purposes of this section, following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely : (a) Where no return of income has been furnished by assessee although his total income or total income of any other person in respect of which he is assessable under this Act during previous year exceeded maximum amount which is not chargeable to income-tax; (b) Where return of income has been furnished by assessee but no assessment has been made and it is noticed by AO that assessee has understated income or has claimed excessive loss, deduction, allowance or relief in return; (c) Where assessment has been made, but (i) income chargeable to tax has been under assessed; or (ii) such income has been assessed at too low rate; or (iii) such income has been made subject of excessive relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed." Issue No. 1 12. As per above provisions, AO should have reasons to believe that any income chargeable to tax has escaped assessment. In instant case, letter of Enforcement Directorate, which was received by AO, contained specific details relating to deposit allegedly made by assessee and her husband. details, which include even address, passport number and bank account number as also details of deposits, are very specific. deposit certificates were also enclosed with this letter. On basis of information contained in this letter, AO as responsible and prudent officer was under obligation to reopen assessment in case of assessee. Thus, it cannot be said that AO did not have reasons to believe that income of assessee chargeable to tax has escaped assessment. There was solid basis, sound and sufficient material before AO in shape of information, which is foundation behind reasons to believe. There is nexus between material/information, which was before AO and formation of belief on basis of such material. It is settled law that adequacy of material is not relevant for having reasons to believe. Thus, on basis of facts as conveyed through letter referred to above, AO was justified in having reasons to believe that income of assessee chargeable to tax has escaped assessment. It may be pointed out that during course of assessment proceedings also, AO raised several queries, which are related to huge deposits in accounts of assessee in financial year relevant to assessment year under consideration. In this regard reference may be made to notices issued by AO under ss. 142(1) and 143(2) of IT Act and detailed replies of assessee for explaining these deposits. These letters of assessee are available in paper book. 13. Hon ble Supreme Court in case ofRaymond Woollen Mills Ltd. vs. ITO & Ors. (1999) 152 CTR (SC) 418 : (1999) 236 ITR 34 (SC), has considered scope of s. 147 of IT Act and has observed as under : "In determining whether commencement of reassessment proceedings was valid, it has only to be seen whether there wasprima faciesome material on basis of which Department could reopen case. sufficiency or correctness of material is not thing to be considered at this stage." In view of ratio of this decision, notice issued by AO is found to be fully valid. Issue No. 1 is, therefore, decided in affirmative and accordingly. Issue No. 2 1 4 . Coming to second issue, provisions of s. 147 provide in unequivocal terms that after having reasons to believe that any income chargeable to tax has escaped assessment, AO can assess or reassess, such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section . In view of terminology used in s. 147, therefore, it is open to AO to consider any other income or any other item of income which comes to his notice during course of reassessment proceedings. argument that only those items can be considered for making additions for which reopening was initiated and not other items, is not sustainable and appears to be fallacious. 15. issue has been considered and decided by various Courts. Hon ble Gujarat High Court in case ofCIT vs. Ahmedabad Manufacturing & Calico Printing Co. Ltd. 1 97 6 CTR (Guj) 214 : (1 97 7) 106 ITR 159 (Guj)observed as under : "Where reassessment proceedings had been validly initiated, but grounds on which they were initiated were subsequently found to be non-existent on position of law as subsequently expounded and hence that particular point regarding which notice of reassessment was issued had to be decided in favour of assessee, it is open to ITO to consider other items and pass reassessment orders regarding those other items even though they were not included in notice under s. 148." 1 6 . Hon ble Delhi High Court in case ofMahanagar Telephone Nigam Ltd. vs. Chairman, CBDT (2000) 162 CTR (Del) 554 : (2000) 246 ITR 173 (Del), considered scope of amended provision of s. 147 in this regard and has observed as under : "But under substituted s. 147, existence of only first condition suffices. In other words, if AO for whatever reason has reason to believe that income has escaped assessment, it confers jurisdiction to reopen assessment. It is, however, to be noted that both conditions must be fulfilled, if case falls within ambit of proviso to s. 147. word "reason" in " phrase "reason to believe" would mean cause or justification, i.e., AO must have cause or justification to know or suppose that income has escaped assessment. At initiation stage, what is required is "reason to believe", but not established fact of escapement of income. At stage of issue of notice, only question is whether there was relevant material on which reasonable person could have formed requisite belief. Whether material would conclusively prove escapement is not concern at that stage. This is so because formation of belief by AO is within realm of subjective satisfaction." 17. In case ofDamodar H. Shah vs. Asstt. CIT (2000) 163 CTR (Guj) 1 : (2000) 245 ITR 774 (Guj), Gujarat High Court has held that if AO had reason to believe that income chargeable to tax has escaped assessment, requisite jurisdictional fact for issuance of notice under s. 148 did exist and even though same turned out to be wrong during reassessment proceedings, there is no valid reason to thwart proceedings under s. 147 at threshold. 18. So far as arguments of learned counsel for assessee that after processing return under s. 143(1)(a) on basis of same information, reassessment cannot be made, is concerned, in case ofMahanagar Telephone Nigam Ltd.(supra) Hon ble Delhi High Court has observed that intimation under s. 143(1)(a) cannot be treated to be order of assessment. According to Hon ble Court, distinction between ss. 143(1)(a) and 143(3) is well brought out by statutory provisions as stood at different points. Hon ble Court has also considered effect of change brought by amendment w.e.f. 1st April, 1 97 9 in scope of under s. 147. observations of Hon ble High Court are as under : "The intimation under s. 143(1)(a) cannot be treated to be order of assessment. distinction is also well brought out by statutory provisions as they stood at different points of time. intimation under s. 143(1)(a) was deemed to be notice of demand under s. 156, for apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery of amount indicated to be payable in intimation became permissible. And nothing more can be inferred from deeming provision. So long as ingredients of s. 147 are fulfilled, AO is free to initiate proceedings under s. 147 and failure to take steps under s. 143(3) will not render AO powerless to initiate reassessment proceedings even when intimation under s. 143(1) had been issued." 19. In case ofCWT vs. D.R. Vadera L/H of Hans Raj Vadera (2000) 163 CTR (Del) 251 : (2000) 246 ITR 348 (Del)the Hon ble High Court has held as under : "Once assessment is reopened previous under-assessment is set aside and whole assessment proceedings start afresh. What is set aside is only previous under-assessment and not original assessment proceedings. order made in respect of escaped item does not affect operative force of original assessment, particularly if it has acquired finality, and original order retains both its character and identity. It is only in case of "under-assessment", that assessment of net income/wealth and tax due has to be recomputed on entire taxable wealth/income, as case may be." Thus, in view of above-referred decisions it is clear that reassessment proceeding can be initiated after intimation under s. 143(1)(a) is issued and such proceedings will not be barred merely because, notice under s. 143(2) of IT Act was not issued after intimation under s. 143(1)(a) within prescribed period. 20. issue relating to scope of s. 147 has been considered in detail by Tribunal, Nagpur Bench in case ofSouth Eastern Coalfields Ltd. vs. Jt. CIT (2002) 77 TTJ (Nag) 401 : (2003) 260 ITR 1 (Nag)(AT). In that case notice under s. 148 was issued for reasons that deduction in respect of contribution made by assessee to CPRA was wrongly allowed in original assessment without assessee filing any particulars or other details in respect of same but in assessment order addition on different items were made. contention of assessee in that case was that since no addition was made in reassessment order with respect to CPRA, grounds for reopening of assessment did not survive and AO has no jurisdiction to continue with proceedings. On this basis, it was contended that entire proceedings were without having valid jurisdiction. contention of learned Departmental Representative on other hand was that once case reopened in s. 147 of IT Act, full assessment was open before AO. Bench after considering various authorities has ordered (sic). Thus, issue stands covered by decision of Hon ble High Court referred to above and decision in case ofSouth Eastern Coalfields Ltd.(supra). Bench considered decisions of Hon ble Court relating to pre- amendment provision of s. 147 and amended provision of same and concluded as under : "A resume of all case laws discussed above relating to pre- amended provisions of s. 147 goes to show that information was basis for forming belief about escapement of income as per pre-amended provisions and AO was required to have such information in his possession to enable him to validly acquire jurisdiction under s. 147 and in absence of very existence of such information, various judicial authorities proceeded to conclude that AO did not have jurisdiction to assess or reassess income of assessee under s. 147. However, where factum of having such information was found to be in existence at time of reopening assessment but in ultimate analysis AO did not find any escapement, reopening was considered valid by judicial forum giving jurisdiction to AO to proceed under s. 147. After amendments made to s. 147 w.e.f. 1st April, 1989, condition precedent is only that AO should have reason to believe that income chargeable to tax has escaped assessment. In present case, reason to entertain belief about escapement of income by way of allowing wrong deduction on account of contribution to CPRA was very much there and same was also communicated to assessee by AO. Although this belief turned out to be wrong during reassessment proceedings, we are of view that it cannot be said that reason to form such belief did not exist at time of initiation of reassessment proceedings by issue of notice under s. 148. Thus, AO had at relevant time reason to believe that deduction on account of contribution to CPRA was wrongly allowed and, therefore, issuance of notice under s. 148 cannot be said to have been done without jurisdiction." In view of above discussion it is to be held that AO is fully competent and entitled to consider other items of income also if such items of escaped income come to his notice during course of assessment proceedings and he has not to confine to matters or items on basis of which proceedings under s. 147 were initiated. Issue No. 2 is, therefore, decided in affirmative and accordingly. Issue No. 3 21. scope of enquiry under amended provisions of s. 147 has been considered by various Courts. In recent case in case ofVipan Khanna vs. CIT(supra), Hon ble Punjab and Haryana High Court has also considered this issue. In that case assessee had claimed depreciation on tax @ 50 per cent in statement of accounts filed with return. return was filed on 31st May, 1994 and was processed under s. 143(1)(a) for asst. yr. 1992-93 on same date. depreciation was admissible to assessee only @ 40 per cent. After noticing this mistake, AO, with view to rectify mistake, issued notice under s. 154/155 of Act on 1st May, 1995 requiring assessee to file objections, if any, to proposed notification. reply of assessee was that no rectification was called for. In support of this reply chart was filed on basis of which it was explained that if depreciation @ 40 per cent is to be calculated then also no rectification will be needed because on one truck no depreciation was claimed in return and if same is added then depreciation claimed will be fully justified. 22. During pendency of proceedings under s. 154/155 assessee filed return of income for asst. yr. 1993-94 on 31st March, 1995. From statement of accounts attached with return it was found that assessee again claimed depreciation @ 50 per cent. ITO while processing return under s. 143(1)(a) restricted claim of depreciation to 40 per cent and made adjustment accordingly. assessee challenged adjustment made by ITO before CIT(A) who deleted addition made by making adjustment under s. 143(1)(a). 23. In this background ITO initiated proceedings under s. 147 of IT Act for assessing income, which had escaped assessment due to excessive claim of depreciation by issuance of notice under s. 145 for both asst. yrs. 1992-93 and 1993-94. 24. Following reasons were recorded in issuing notice under s. 148 : "Asst. yr. 1992-93 : 31st December, 1996 : In this case assessee claimed excessive depreciation at 50 per cent, whereas assessee was entitled to depreciation at 40 per cent, under IT Rules. Hence, I have reasons to believe that having income chargeable to tax was escaped assessment for asst. yr. 1992-93; Accordingly, issue notice under s. 148 of IT Act, 1961, for asst. yr. 1992-93. Identical reasons were recorded in respect of asst. yr. 1993-94 as well." 25. In order to finalise assessment on basis of proceedings under s. 147 of Act, AO issued notice under ss. 143(2) and 142(1) of IT Act requiring assessee to produce books of account and to furnish information on various items. 26. assessee challenged action of AO under s. 144(a) before Dy. CIT but contention of assessee was not accepted by him. 27. Thereafter assessee filed writ petition before Hon ble High Court against order passed by Dy. CIT. 2 8 . Hon ble High Court has considered scope of s. 147 as amended w.e.f. 1st April, 1989 and has observed as under : "Prior to amendment w.e.f. 1st April, 1989, AO could frame assessment under s. 143(1) of IT Act, 1961, without requiring presence of assessee. Alternately he could issue notice under sub-s. (2) of s. 143 of Act and require assessee to produce his books of account and other evidence in support of return filed by him and thereafter frame assessment under sub-s. (3) of s. 143 of Act. Therefore, it was necessary that assessment order either under sub-s. (1) or under sub-s. (3) of s. 143 of Act had to be passed. However, after amendment made w.e.f. 1st April 1989, position has materially changed. Now, AO initially processes return under s. 143(1)(a) of Act and determines amount payable or refundable on that basis. It is not necessary for him to frame assessment in each and every case. However, in case he chooses to verify return and frame assessment, he has to issue notice under sub-s. (2) of s. 143 and require assessee to produce his books of account and other materials in support of return. Thereafter he can make assessment under sub-s. (3) of s. 143 of Act. Another important change incorporated in sub-s. (2) of s. 143 of Act is that notice under this sub-section cannot be served on assessee after expiry of 12 months from end of month in which return is furnished. Therefore, in case where return is filed and is processed under s. 143(1)(a) of Act and no notice under sub-s. (2) of s. 143 of Act thereafter is served on assessee within stipulated period of 12 months, assessment proceedings under s. 143 come to end and matter becomes final. Thus, although technically no assessment is framed in such case, yet proceedings for assessment stand terminated." 29. On going through order of learned High Court it is clear that issuance of notice under s. 148 was found to be justified. It was also held that in view of amendment made under s. 147 of IT Act w.e.f. 1st April, 1989, AO could not only assess or reassess escaped income in respect of which proceedings under s. 147 have been initiated but also any other income chargeable to tax which may have escaped assessment and which comes to his knowledge subsequently in course of such proceedings. 30. According to Hon ble High Court through letter dt. 30th July AO sought general information on other issue merely to verify return. It was held that such general enquiry could only be made by issuing notice under sub-s. (2) of s. 143 within stipulated period. It was further held that, on facts of that case, it was not case of Revenue that during course of proceedings under s. 147 of Act it had come across any material relating to items mentioned in letter dt. 30th July, 1999 suggesting escapement of income under any of those heads. On this basis, it was held that directions issued by Dy. CIT under s. 144(a) in upholding conduct of AO in issuing letter seeking general information could not be sustained. From this decision also, it is clear that jurisdiction of AO is not restricted only to portion of escaped income in respect of which proceedings had been initiated but to all other items of income, which may have escaped assessment. items of income, which may have escaped assessment. 31. On basis of decision of Hon ble Jurisdictional High Court in case ofMahanagar Telephone Nigam Ltd.(supra) it is to be held that intimation under s. 143(1)(a) cannot be equated with assessment as it is only demand notice. However, as held by Hon ble Punjab and Haryana High Court in case ofVipan Khanna(supra), AO cannot make roving and fishing inquiry during reassessment proceedings and has to confine to specific items of escaped income only, if he has not taken recourse to process under s. 143(2) within time prescribed for that purpose. Thus, after expiry of period prescribed for notice under s. 143(2) scope of inquiry will be limited and shall not be same as is available in case of original assessment under s. 143(3) of IT Act. This issue is, therefore, decided accordingly. 32. On basis of our discussion and findings recorded while adjudicating various issues formulated in this matter, following preposition may be culled out : (1) proceedings under s. 148/147 can be initiated if AO has reasons to believe that any income chargeable to tax has escaped assessment. only requirement is that at stage of initiation of such proceedings there must exist some grounds or material for formation of belief and there should be nexus between such grounds and reason to form belief that any income has escaped assessment. (2) reopening cannot be held to be invalid merely because in ultimate analysis no escapement of income is found in relation to any ground on basis of which proceedings for reopening were initiated. In other words if there was requisite material for assumption of jurisdiction at that stage but s m e could not be substantiated during reassessment proceedings, then proceedings under s. 147 cannot be held to be invalid. (3) reassessment proceedings may be initiated on one ground but reassessment may be done on any other ground, if such ground comes to notice of AO during course of assessment proceedings. It is, therefore, open to AO to consider other items even though they were not included under s. 148. (4) intimation under s. 143(1)(a) cannot be treated to be order of assessment and so long as ingredients of s. 147 of IT Act are fulfilled, AO shall be free to initiate proceedings under s. 147 and failure to take steps under s. 143(2) will not deprive AO in exercising jurisdiction under s. 147 of IT Act. (5) In reassessment proceedings, whole of original assessment is not set aside and reassessment is to be made only in respect of escaped income which is under assessed. (6) During proceedings of reassessment under s. 147/148, AO is not empowered to make roving and fishing inquiries and to make general inquiry or to seek general information in relation to return filed by assessee. (7) item of income on which reassessment is made must bear characteristics of escaped income. touchstone, therefore, is that reassessment can be made only of income which has escaped assessment and which is under assessed. (8) AO can exercise power under s. 147 in relation to other items of income which were not basis for formation of belief or reasons to believe for issuing notice under s. 148 but for assessing such income he should indicate that any material or information has come to his notice during reassessment proceedings through external or internal source but he cannot reassess any item of income only after gathering general information or on conducting general probe from assessee during course of reassessment proceedings. 3 3 . last point may be illustrated in following manner. AO reopens assessment on ground that assessee claimed excessive depreciation. During course of reassessment proceedings it comes to his notice through information form ADI that assessee has made huge deposits in his bank account, which were not disclosed in return. AO after making inquiry can definitely make addition in respect of such income, which escaped assessment. Similarly, if from sales-tax Department he gets information that assessee has suppressed sales, then after making inquiry on this issue, he can make addition accordingly. Thus, any item of escaped income, which comes to h i s notice during reassessment proceedings, can be included in reassessment proceedings. It is not open to him to make entire assessmentde novoor afresh. He has to confine only to particular items, which escaped assessment or in relation to which there was under-assessment or excessive relief were allowed. Such items have to be identified and specified before making reassessment in relation thereto. 34. above conclusion is fully fortified from various authorities referred to above. language and terminology used in s. 147 also makes it clear that it is particular income, which in opinion of AO has escaped assessment and for which reassessment is to be made. For sake of clarity, at cost of repetition we are reproducing provisions of s. 147 again which are as under: "147. If Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to provisions of ss. 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section , or recompute loss or depreciation allowance or any other allowance, as case may be, for assessment year concerned (hereafter in this section and in ss. 148 to 153 referred to as relevant assessment year) : " 35. On closer scrutiny of above provision, it is clear that term any income has been used intentionally in this provision and it cannot be taken into entire income or total income. word such income also qualifies any income . Similar interpretation can be made of various clauses of Expln. 2 to s. 147. deemed escaped assessment can be inferred where income chargeable to tax has been under assessed. In view of above observations, Issue No. 3 is decided accordingly. Issue No. 4 36. In context of above postulates, on facts and material of case it is found that AO undertook general, fishing and roving inquiry while proceeding under s. 147. As held above, such course was not available to him. From assessment order, it is not clear as to which income or items of income were found to be items of escaped assessment. He has not given indication of fact that any such items came to his notice during reassessment proceedings. It is to be pointed out that scope of inquiry in reassessment proceedings is not same as is in regular assessment. 37. On going through assessment order and material on record, it is found that vide letter dt. 28th Sept., 1999 available at p. 11 of paper book, AO directed assessee to furnish details of various items which are as under : 1. brief note on income earning activities during financial year 1993-94. 2. Capital account for year ending on 31st March, 1994. 3. Details of loans taken during year with confirmed copy of account of lenders along with documentary evidence regarding identity and creditworthiness of lenders. 4. Exact particulars of immovable properties owned giving addresses, location, date of acquisition and source of investment in acquisition of such properties. Investment made in immovable properties during financial year 1993- 94 and source of such investment. 5. Details of investment made in movable assets during financial year 1993-94. 6. Details of bank accounts/bank deposits giving account number, name and address of bank and nature of account along with copy each of bank statement/passbook of such bank account/bank deposits for financial year 1993-94. 7. Details of bank account/bank deposits with any foreign bank giving account number, name and address of bank and nature of account, along with copy each of bank statement/pass book of such bank accounts/bank deposits for financial year 1993-94. 8. Details of investment with companies/concerns as on 31st March, 1994. 9. Details of vehicles owned during financial year 1993-1994 with source of investment in acquisition of such vehicles. 10. Details of gifts received/given from/to any person(s) during financial year 1993-94 along with documentary evidence. 11. Details of foreign visits made during financial year 1993-94. Expenditure made in such foreign travelling and source of such expenditure. 12. Details of family members, their activities and withdrawals made for household expenses during financial year 1993-94. You are also requested to produce your books of account, bank statements/bank pass books for financial year 1993-94. date and time fixed for compliance is 11th Oct., 1999 at 10.30 a.m. Notices under ss. 143(2) and 142(1) of IT Act are enclosed. Similar general queries were made through letter dt. 17th July, 2000, which are as under : 1. brief note on income earning activity during year Annex.-A. 2. Capital account as on 31st March, 1994 Annex. -B. 3. Detail of loan taken during year Annex. -C. 4. Detail of immovable properties acquired during year Annex. -D. 5. Detail of investment in movable assets Nil 6. Detail of bank account with photocopy of bank statement Annex. -E. 7. Detail of bank account-bank deposit outside India Nil 8. Detail of Investment with companies/concerns Annex. -F. 9. Detail of vehicle owned during year Nil 10. Detail of gift received during year Annex. -G. 11. Detail of foreign visit during year Annex. -Nil 12. Detail of family members Annex. -H. 38. Likewise vide letter dt. 13th Nov., 2000 he inquired from assessee about justification of interest accrued on FDR deposits in Dena Bank and credits in Bank of Baroda, etc. He also directed assessee to explain various other deposits in her account and sources thereof. She submitted detailed explanation and gave details of sources. AO went on to examine source of source i.e., capacity of person who advanced amount and genuineness of transaction. He even doubted genuineness of gifts and capacity of donors. He also estimated household expenses and made additions on all these items without pointing out in assessment order or elsewhere that such escaped items of income came to his notice during reassessment proceedings. It is found that in balance sheet filed with return that assessee had disclosed all credits, etc., and no recourse was taken by AO to process under s. 143(2) and 143(3) within period prescribed for that purpose. In view of decision in case ofVipin Khanna(supra)the assessment proceedings stood terminated after expiry of period prescribed for issuance of notice under s. 143(2) of IT Act in this case. Hence, AO could have considered only those specific and particular items which escaped assessment and which were under assessed. He could not undertake same general inquiry under s. 147 of IT Act in this case, which he could have undertaken while making regular assessment. 39. In view of above, additions made by AO in consequence of such general inquiry or roving and fishing inquiry cannot be sustained and have to be deleted. We, therefore, delete various additions challenged in this appeal as having been made on basis of such fishing and roving inquiry which as having been made on basis of such fishing and roving inquiry which course was not legally justifiable. We may clarify here that assumption of jurisdiction by AO in issuing notice under s. 148 and in proceeding under s. 147, was fully justified and, therefore, assessment order cannot be quashed. To this extent, therefore, challenge in additional ground is not acceptable. In view of our findings, recorded on various issues formulated by us, additional ground is disposed of accordingly. 40. While deciding additional ground, we have observed that various additions made in consequence of general and roving enquiry conducted by AO, which course has not been approved by us, cannot be sustained. However, we consider it proper to decide additions challenged in various grounds in this appeal on merit also. 41. Ground No. 1 : AO had made addition of Rs. 1,26,000 on account of loan from Mr. Digvijay Singh. assessee had furnished full particulars as also source. It was explained that these advances were received by her through banking channel. Details of drafts, etc. were also fully disclosed. These details are available on p. 34 of paper book, which is balance sheet of Mr. Digvijay Singh as on 31st March, 1994. So far as amount of Rs. 71,000 is concerned, it came to Shri Digvijay Singh in following manner : Rs. 10,000 cash from Inderjeet Singh; Rs. 40,000 advances; and Rs. 21,000 gifts received. 42. amount of Rs. 55,000 as per cash accounts on 1st April, 1993 to 31st March, 1994, as per p. 34 of paper book, also came by cheque to assessee. Thus, assessee has discharged burden, which lay upon her. However, Departmental authorities did not accept explanation of assessee. In our considered opinion this approach is not justified in view of ratio of decision in case ofSarogi Credit Corpn. vs. CIT 1 97 5 CTR (Pat) 1 : (1 97 6) 103 ITR 344 (Pat). addition made by AO and sustained by learned CIT(A) is accordingly deleted. 43. Ground No. 2 :So far as addition of Rs. 4,67,600 on account of loan from late Shri I.B. Singh is concerned, assessee had explained source of this loan Shri I.B. Singh had expired and therefore, confirmation in this regard was given by his son through affidavit which is on record. learned CIT(A) has not accepted confirmation given by Shri Awanindra Singh, son of late Shri I.B. Singh. It was also explained that this amount of Rs. 4,67,600 was received by assessee through account payee D.D. which was paid to seller of property No. UG/18, Somdutt Chamber No. 1, Bhikaji Kama Place, New Delhi, on behalf of assessee. Shri Singh was Government employee and retired from service in 1 97 7. He also expired in 1999. Thus, as creditor had expired, no more details about source of source could be given by assessee. In our opinion, therefore, assessee discharged burden which lay upon her. In view of above, learned CIT(A) was not justified in sustaining addition of Rs. 4,67,600 and same is deleted. 44. Ground No. 3 :Addition of Rs. 50,000 has been made on account of low withdrawal. AO has drawn inference that assessee must be maintaining farmhouse E-18, Bijwasan, New Delhi. This farmhouse was purchased by her husband Mr. Awanindra Singh in September, 1994. assessee was not living in this farmhouse but was staying at A-2/177. AO was, therefore, not justified to include expenditure allegedly incurred by assessee on employees for maintaining farmhouse. 45. Allahabad Bench of Tribunal in case ofRajkumar Jain vs. Asstt. CIT (1994) 49 TTJ (All)(TM) 558 : (1994) 50 ITD 1 (All)(TM)has held that additions made on estimate basis and on assumptions and presumptions cannot be sustained. In this case husband of assessee was also making withdrawals for household expenditure. Hence, in totality of circumstances relating to this matter, addition cannot be justified and same is deleted. 46. In view of above, all additions challenged in ground Nos. 1 to 3 are deleted. Therefore, on merits also, assessee succeeds. 47. In result, appeal stands allowed. *** POONAM RANI SINGH v. DEPUTY COMMISSIONER OF INCOME TAX