JUDGMENT K. JAGANNATHA SHETTY, J. 1. The Tribunal has referred the following question under s. 256(1) of the IT Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment was validly reopened under s. 147(a) r/w s. 149(1)(a)(ii) of the IT Act, 1961, for the asst. yr. 1967-68 ?" 2. The reference arises out of an order of reassessment made on the assessee, an individual, for the asst. yr. 1967-68. The accounting year ended on March 31, 1967. The assessee filed a return originally. That return was not accepted and the ITO (ITO) added a sum of Rs. 5,914 to the income returned as difference in gross profit. With this addition, the assessment was completed. There was no appeal against the order and, thus, it has become conclusive. Thereafter, the ITO noticed on the basis of the voluntary disclosure made by the assessee under s. 15(1) of the Voluntary Disclosure of Income and Wealth Act, 1975, that income had escaped assessment. He found that in the original statement, a closing stock of Rs. 36,106 was shown, whereas in the declaration of his wealth as on March 31, 1967, the closing stock was taken at Rs. 89,610. The difference of Rs. 53,504 was held to have escaped assessment. The ITO, therefore, initiated proceedings under s. 147(a) after obtaining prior approval of the CBDT and sought to tax the sum of Rs. 53,504. The assessee appealed to the AAC (AAC). The AAC upheld the reopening of the assessment as well as the addition, but allowed a reduction of Rs. 5,914 being the intangible additions made in the original assessment against the value of the escaped closing stock. 3. The assessee appealed to the Tribunal. There, it was urged that, in view of the order of the AAC, the escaped income was below Rs. 50,000 and, therefore, s. 149(1)(a)(ii) was not satisfied and the reopening of the assessment was bad in law. 4. The Tribunal found that s. 149(1)(a)(ii) requires that income that escaped assessment would amount to or is likely to amount to Rs. 50,000 or more and on the evidence on record, the ITO could have reasonably believed that income escaped assessment could have exceeded Rs. 50,000. 4. The Tribunal found that s. 149(1)(a)(ii) requires that income that escaped assessment would amount to or is likely to amount to Rs. 50,000 or more and on the evidence on record, the ITO could have reasonably believed that income escaped assessment could have exceeded Rs. 50,000. The Tribunal went on to state that the ITO need not have taken note of any intangible additions in the original assessment and the fact that the AAC finally reduced the addition did not detract from the reasons recorded by the ITO. So stating the Tribunal dismissed the appeal. Sec. 149(1)(a)(ii) reads : "for the relevant assessment year, where eight years, but not more than sixteen years, have elapsed from the end of that year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year" This is similar to s. 34 of the Indian IT Act, 1922. The expression "likely to amount to" appears to mean that the ITO must form an honest belief that the amount of escaped income for the period in question is likely to exceed Rs. 50,000 or more, before issuance of notice. The satisfaction or belief may be tentative and it cannot be found fault with if after final adjudication it is found that the income escaped was less than Rs. 50,000. But the case on hand does not fall into this category. The ITO in the original assessment made an addition of Rs. 5,914 to the declared income as intangible addition. That was the difference in the estimated gross profit and the income returned. May be that addition was intangible, but none the less, it constituted the income of the assessee as real income. 5. In S. Kuppuswami Mudaliar vs. CIT (1964) 51 ITR 757 (Mad), it was observed at : "Additions are no doubt made very often on estimate basis. But it can never be said, or at any rate the Department cannot contend, that the amount of the addition is not the real income but something which the assessee may not have earned. It is wholly illogical for the Department to contend that the addition was only for purposes of taxation and that it should never be taken as true income of the assessee. This principle has been approved by the Supreme Court in Anantharam Veerasinghaiah and Co. It is wholly illogical for the Department to contend that the addition was only for purposes of taxation and that it should never be taken as true income of the assessee. This principle has been approved by the Supreme Court in Anantharam Veerasinghaiah and Co. vs. CIT (1980) 16 CTR (SC) 189 : (1980) 123 ITR 457 (SC), wherein it was observed at : "Now it can hardly be denied that when an 'intangible' addition is made to the book profits during an assessment proceeding, it is on the basis that the amount represented by that addition constitutes the undisclosed income of the assessee. That income, although commonly described as 'intangible', is as much a part of his real income as that disclosed by his account books. It has the same concrete existence. It could be available to the assessee as the book profits could be. IN Lagadapati Subba Ramaiah vs. CIT (1956) 30 ITR 593 (AP), the Andhra Pradesh High Court adverted to this aspect of secret profits and their actual availability for application by the assessee. That view was affirmed by the Madras High Court in S. Kuppuswami Mudaliar vs. CIT (supra)" 6. If the addition made by the ITO in the original assessment had been taken into consideration as the real income of the assessee, there was absolutely no basis for the ITO to form an opinion that the income that escaped assessment amounts to or is likely to amount to Rs. 50,000 or more. Those figures were known to the ITO since they have been crystallised by the addition made in the original assessment order. At the stage of reopening the assessment, the ITO had before him the quantified amount for perusal. He could not have ignored the same for the purpose of reopening the assessment. It is not in dispute that if that addition being the real income had been taken into consideration by the ITO, the income which escaped assessment would be less than Rs. 50,000 and the ITO had no jurisdiction to initiate proceedings under s. 147 at all. The Tribunal, therefore, was in error in holding that the opinion formed by the ITO was justified on the facts. On the facts available from the original assessment order, the opinion formed by the ITO was absolutely unsustainable. In the result, we answer the question in the negative and in favour of the assessee.