This is appeal filed by assessee against order of CIT(A) relating to asst. yr. 1996-97. In first ground, assessee is challenging reopening of assessment under s. 147. In second ground assessee is challenging confirmation of addition of Rs. 47 lakhs. briefly stated facts of case are that assessee was architect by profession. For asst. yr. 1996-97 he filed return declaring income of Rs. 19,81,747 on 31st Oct., 1996. return was processed under s. 143(1)(a) of Act. Thereafter, AO issued notice under s. 148 of Act dt. 23rd June, 1998 calling for return. AO mentioned reasons for reopening assessment, in para 2 of his order that "the assessee claimed brokerage expenses of Rs. 47,00,000 against brokerage income received at Rs. 70,50,000. claim of assessee was excessive in nature and was not supported by any evidence. Therefore, income to extent of claim of expenses of Rs. 47,00,000 escaped assessment and notice under s. 148 was issued and served on assessee." Thereafter assessee was required to furnish details in regard to genuineness of claim of expenses for purpose of completion of assessment. As per order of AO, assessee has not co- operated, therefore, he completed assessment under s. 143(3) by making disallowance of brokerage expenses of Rs. 47 lakhs and further making addition of Rs. 3 lakhs under s. 68 of Act. assessee preferred appeal before CIT(A) before whom, order of AO was challenged in making addition of Rs. 47 lakhs on account of disallowance of expenses of brokerage and making addition of Rs. 3 lakhs under s. 68. CIT(A) deleted addition of Rs. 3 lakhs made by AO under s. 68. However, he confirmed addition of Rs. 47 lakhs on account of disallowance of brokerage expenses. Department filed appeal before Tribunal challenging deletion of addition of Rs. 3 lakhs. appeal of Department has already been disposed of by Tribunal in ITA No. 3027/Mum./02 vide order dt. 29th July, 2005 by which order of CIT(A) has been confirmed. assessee has challenged sustenance of addition of Rs. 47 lakhs and has also challenged reopening of assessment by taking legal ground by ground No. 1. learned counsel for assessee vehemently argued that there was no reason to reopen assessment by AO by issuing notice under s. 148 as n o material whatsoever was available with AO for his belief that any assessment has escaped. There was no information of any kind that assessee has booked bogus expenses of brokerage of Rs. 47 lakhs. Neither there was any evidence that assessee has received money back from payee to whom commission was paid. For forming opinion for belief that some income has escaped assessment, there must be some material, or some information. No such material was available before AO; therefore, reopening was bad in law. In support of his contention, learned counsel for assessee placed reliance on various decisions of Tribunal as well as various High Courts mentioned in written submissions filed on date of hearing of appeal. It was further submitted that if such approach of Department is allowed or accepted then plethora of dispute will arise and on each and every point assessment will be reopened. Further reliance was placed on decisions in Manish Ajmera vs. Asstt. CIT (2005) 96 TTJ (Chd) 896: (2005) 95 ITD 111 (Chd) and Bhubaneswar Stock Exchange vs. Asstt. CIT (2005) 95 TTJ (Ctk) 1033: (2005) 96 ITD 480 (Ctk). Further reliance was also placed on various case laws, copies of which are placed in compilation. Thereafter, learned counsel for assessee argued on merit and submitted that commission was paid through account payee cheques as per terms and conditions of Memorandum of Understanding (MoU) entered between assessee and respective party. assessee was not directly or indirectly related to person to whom commission has been paid. It was further explained that there was reason for entering into MoU as assessee was not able to deal properly of his own, therefore, he took help of Shri Pradeep Agarwal, Director of Lahiri Laminates (P). Ltd. (LLPL) with whom MoU was signed. With efforts of Shri Pradeep Agarwal, Director of LLPL, sale was matured and assessee received commission of Rs. 70,50,000 and paid further commission of Rs. 47 lakhs to Shri Pradeep Agarwal as per MoU. It was further submitted that Director Shri Pradeep Agarwal of LLPL could not appear before authorities as he met with serious accident during proceedings before lower authorities. Therefore, he has written letter on 1st March, 2006 directly to AO accepting in having received of Rs. 47 lakhs through account payee cheque as brokerage from assessee. Copy of confirmatory letter sent to AO directly is placed at p. 20 of paper book. copy of receipt of return of income and computation along with copies of accounts of M/s LLPL are placed from pp. 21 to 25, copies of cheques or demand drafts issued in name of LLPL placed at pp. 26 to 29 of paper book. copy of affidavit of Shri Pradeep Agarwal, Director of LLPL is placed at p. 31 of paper book by which it was confirmed that he has received sum of Rs. 47 lakhs on account of brokerage received from assessee and declared in return of income of company. attention of Bench was drawn on various other copies of information placed on record and letter issued by assessee to AO by which all clarifications were given, during course of assessment proceedings. In view of these submissions, it was further explained tht onus laid upon assessee has been duly discharged and there is no evidence with department that assessee has received money of Rs. 47 lakhs back from LLPL. Therefore, it cannot be held that brokerage expense paid by assessee was not genuine. Further reliance was placed on written submissions placed on record. On other hand, learned Departmental Representative placed k reliance on orders of authorities below. It was further submitted that assessment was reopened in view of Expln. 2 of s. 147 as assessment was completed by giving deduction of Rs. 47 lakhs which was otherwise not allowable. After considering rival submissions and perusing other relevant material on record, we find that assessee deserves to succeed in its appeal on legal ground as well as on merit. Sec. 147 reads as under "..if AO 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 of 153, assessee or reassess such income and also in other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section or re-compute loss or depreciation allowance or other allowances, as case may be, for depreciation allowance or other allowances, as case may be, for assessment year concerned " "Explanation 2: (a) and (b)** (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) excessive loss or depreciation allowance or any other allowance under this Act has been computed." After reading provisions of s. 147, we find that there should be some reason to believe that some income has escaped. AO merely guessed that brokerage income paid at Rs. 47 lakhs has escaped. How it is escaped, nothing has been mentioned in reason recorded by AO except that commission paid is excessive and not supported by any evidence. How AO arrived at conclusion that commission is excessive is not borne out either from reasons recorded which are part of AO s order or from order of AO itself. Regarding observation that there is no evidence is also not understandable what evidence is to be enclosed along with return. P&L a/c duly audited and along with audit report was enclosed with return filed by assessee on 31st Oct., 1996. On basis of computation and P&L a/c etc., assessment was completed under s. 143(1)(a) of Act. If thereafter some material is found or seen or any other information was with AO then only it can be said that there was reason to believe that some income has escaped assessment. Without any information or material, assessment cannot be reopened. This is settled principle of law. Various Benches of Tribunal and various High Courts have clearly held that before forming opinion, there must be some reason to believe that any part of income has escaped assessment. If present approach of Department is accepted, then each and every case can be reopened by mentioning that income has escaped assessment. Explanation 2 is added to s. 147 just to explain what type of income can be said to have escaped assessment. However, Expln. 2 that has to be read with main provisions of s. 147. Under s. 147 main condition is which is to be fulfilled is that there should be some reason to believe that income has escaped assessment. In present case, no such material or information was available with AO that how expenses of Rs. 47 lakhs has escaped assessment. In case of Manish Ajmera vs. Asstt. CIT (supra), it has been observed and held by Chandigarh Bench of Tribunal, as under: "For asst. yr. 1996-97, no assessment was made under s. 143(3). return of income had been processed by AO under s. 143(1). Notice under s. 148 was issued after expiry of four years from end of previous year. reasons for reopening of assessment were that capital gain on sale of land was liable to be assessed in asst. yr. 1996-97 as against asst. yr. 1997- 98; that mercantile system of accounting was not followed and that advance purchases and advance sales had not been taken to profit and loss account. above issues were evidently to be decided on basis of evidence and enquiry. Admittedly, AO had not issued any notice to assessee under s. 143(2). On basis of reasons recorded by AO, one could not come to definite conclusion that income of assessee had escaped assessment. It was different matter that after making inquiry, AO could take view that income of assessee as returned was not acceptable. Since there was no definite material available on record to establish that income of assessee had escaped assessment, it was not permissible for AO to reopen assessment for making fishing inquiries. issues raised by AO for reopening of assessments were on basis of original return filed by assessee. AO had not issued notice under s. 132(2) for verification of return. Thus, assessment in respect of return had become final. There was no fresh information available with AO on basis of which, it could be said with some amount of certainly that income of assessee had escaped assessment. issues raised by AO were such that inquiries could be made and issues determined after consideration of material on record, evidence, if any, furnished by assessee and submissions made by assessee. Such course is not open under s. 147. Before notice under s. 148 assessee. Such course is not open under s. 147. Before notice under s. 148 is issued for reopening of assessment under s. 147, AO has to form opinion on basis of material on record, that income of assessee has escaped assessment. On basis of material available to AO at time of assessment under s. 143(3) or 143(1), AO cannot change his opinion for purpose of making reassessment. There has got to be some material on basis of which AO could have reasons to believe that income of assessee has escaped assessment. Such belief is not permissible on basis of mere change of opinion. AO, in instant case, had not issued any notice under s. 143(2) considering return as correct. Taking totality of facts and circumstances of case into consideration and in light of various decisions, reopening of assessment for all three assessment years was not valid. same were, accordingly, cancelled.". In case of Bhubaneswar Stock Exchange vs. Asstt. CIT (supra), it has been observed and held by Cuttack Bench of Tribunal as under: "After total substitution of s. 147 w.e.f. 1st April, 1989, scope of income escaping assessment has considerably been enlarged and expanded. Now it is much easier to reopen proceedings under s. 147, especially when assessment under s. 143(3) has not been done. This is so possible by virtue of different clauses of Expln. 2 to newly introduced s. 147. However, conditions relating to formation of reasonable belief about escapement of income and also requirement of recording said reasons remain intact even in substituted provisions of ss. 147 and 148 etc. reasons recorded in show-cause notice did not have any nexus with formation of belief about escapement of income. issue relating to s. 10(23C) could not be considered as reason for coming to conclusion about escapement of income...." After considering both decisions decided by respective Benches of Tribunal and taking into consideration facts of present case, we find that there was no material with AO for forming opinion that any income has escaped assessment. Various decisions of various High Courts have been considered by different Benches of Tribunal in cases referred above and then conclusion was arrived at that without any information or material, reopening of assessment under s. 147/148 was bad in law. Before reopening of assessment, there was no material with AO to form opinion. After starting scrutiny only it could be said that commission paid by assessee is allowable or not. As stated above before issuance of notice under s. 148, there was no information or material with AO that any income has escaped assessment. Therefore, taking into totality of facts and circumstances of case and taking into consideration decisions referred above, we quash reopening of assessment by holding that same is bad in law. Though, we have quashed reopening of assessment, however, arguments were advanced by parties on merit also, therefore, we dispose off grounds on merit also in following manner. After considering submissions and perusing other material on record, we find that assessee has discharged its onus by providing complete details of payee to whom commission was paid. copies of MoU entered into between parties were filed. details of payment made to M/s LLPL was filed. Complete address was given. Notice was issued by Department; however, none could appear on behalf of LLPL as Director of company met with serious accident. letter of Shri Pradeep Agarwal, Director of LLPL confirming transaction was filed and copy of which is placed at p. 20 of paper book. He has also confirmed transaction through his affidavit. He has also confirmed that M/s LLPL filed IT Returns offering sum of Rs. 47 lakhs in P&L a/c. Complete details of IT records were also filed. Therefore, in this way, it is seen that onus lay upon assessee has duly discharged. Nothing has been brought on record that amount paid by assessee has received back by assessee under hand or party concerned has denied receipts of amount. Without any substantive evidence or material, disallowance of brokerage paid by assessee was not justified at end of AO and again end of CIT(A). Therefore, we are of considered view that assessee has paid commission as per MoU entered and rightly had claimed deduction of same against commission received which has direct nexus between receipt and payment of commission. Accordingly, we hold that deduction claimed by assessee was allowable. Therefore, same is allowed and addition of Rs. 47 lakhs is deleted. In result, appeal of assessee is allowed. *** SWARAN SINGH SOKHEY v. INCOME TAX OFFICER