Dismissing the appeal against writ petition the Court held that against reassessment proceedings initiated on the ground that the United Kingdom subsidiary of the assessee, which raised funds through step-up coupon convertible bonds was a sham entity and the funds were actually the assessee’s unaccounted income, the Supreme Court held that there were sufficient reasons to believe that income had escaped assessment, but found that the assessee had made full and true disclosure of all material facts and quashed the notice under section 148 issued after four years without establishing non-disclosure, but granted liberty to the Department to issue a fresh notice taking the benefit of the second proviso to section 147, which related to income in relation to assets located outside India. Based thereon, the Assessing Officer issued notice for reassessment stating that the assessee had financial interest in the United Kingdom-based company which had raised funds, and that the genuineness of the entire transaction was dubious and relying upon the findings of the Dispute Resolution Panel that the subsidiary companies were sham transactions and that the assessee had routed its undisclosed income through these companies. On a writ petition the court held that the findings rendered by the Supreme Court bound the parties including the assessee, that the decision to reopen was based on the liberty which was granted by the Supreme Court in the first round of litigation and only placed the Department under the obligation of informing the assessee of their intent to invoke and rely upon the second proviso to section 147, that sufficient material existed before the Assessing Officer which would have justified the power to reassess being exercised, and that the court would not review the findings rendered in this context in the first round of litigation. The appeal dismissed. However the question whether the undertaking furnished by the assessee would amount to a corporate guarantee or a mere obligation which could be viewed as an international transaction was kept open for the assessee to canvass before the Assessing Officer.