TaxTMI 
TaxTMI 
2014 (10) TMI 226
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....y. 2. The counsel are agreed that the facts and the issues arising for consideration in both the petitions are identical. Therefore, for the sake of convenience, we shall refer to the facts in Writ Petition No.1360 of 2006 before considering the issues involved in this group of petitions. 3. The petitioner filed its return of income for the Assessment Years 1998-1999 on 2 November 1998 disclosing a loss of Rs. 4.98 lakh. On 30 March 2001, the Assessing Officer passed an order under Section 143(3) of the Act determining the petitioner's income at Rs. 47.11 lakhs. In the course of the assessment, the Assessing Officer held that the interest paid on borrowings was a business expenditure to be allowed as a revenue expenditure. On the abov....
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....s letter dated 23 December 2005 objected to the reasons furnished in support of the impugned notice dated 23 March 2005. However, the Assessing Officer by an order dated 20 March 2006 rejected the petitioner's objection by a common order for both the Assessment Years 1998-1999 and 1999-2000. 6. Mr.Andhyarujina, learned senior counsel appearing for the petitioner in support of the petitions submits - (a) The notices have been issued beyond the period of four years from the end of the relevant assessment year without in any manner indicating any failure on the part of the petitioner to disclose truly and fully all material facts for purposes of assessment in the petitioner's case; (b) The impugned notices are a result of a mere cha....
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....s, on the above basis it is submitted that the petitions be dismissed. 10. Admittedly, the impugned notices have been issued beyond the period of four years from the end of the relevant assessment year in both the petitions. The reasons as furnished to the petitioner, reproduced herein above, do not indicate even remotely any failure on the part of the petitioner to disclose truly and fully material facts necessary for assessment. The reasons proceed on the basis that for the subsequent assessment year, the Assessing Officer has held the interest paid on borrowings is capital in nature and, therefore, not allowable as an expenditure. Consequently, it is submitted that income chargeable to tax has escaped assessment. However, the reasons no....