Dismissing the petition the Court held that  the son of the managing director of the company which owned the land was a substantial stake holder in the assessee-firm. The transactions between the assessee-firm and company were so arranged that the entire sale proceeds of the land and building were received by the firm and a portion was thereafter diverted to the company, apart from the amount diverted through the partner as share of profit from the firm. Fresh tangible material had come into the possession of the Assessing Officer through the order of the Tribunal, which was in the public domain. The Assessing Officer had omitted to examine whether the related party transaction remained at arm’s length while concluding the original assessment. There was no deliberation on this aspect and hence, failure to undertake proper enquiry resulted in excessive and unreasonable deduction to the assessee-firm. This required correction and therefore, the reassessment proceedings were justified. (AY.2009-10, 2010-11)