KAPSTONE CONSTRUCTIONS Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This Petition under Article 226 of the Constitution impugns notice dtd. 27/3/2019 issued under Sec. (u/s) 148 of the Income Tax Act, 1961 (Act) for Assessment Year (AY) 2012- 13 and the order dtd. 5/10/2019 rejecting the objections.

(2.) The record indicates that the Assessment Order u/s 143(3) was passed on 26/3/2015 after the case was selected for scrutiny. Evidently, the notice u/s 148 of the Act is issued after expiry of four years and the proviso to Sec. 147 of the Act applies. Respondents have to show there was failure to truly and fully disclose material facts as held by this Court in Ananta\ Landmark (P) Ltd. v DCIT CC 5(3) Mumbai. [2021] 131 taxmann.com 52

(3.) We have examined the reasons recorded annexed to the Petition that are evidently premised on 'perusal of the case records'. The Assessment Officer (AO) records that the assessee had paid interest on borrowed funds for projects which are project funds and consequently the interest expense ought to have been disallowed and added to the Work in Progress (WIP) of the assessee. We find nothing to indicate failure to disclose any material fact. Upon examining the order u/s 143(3) we find that the AO has considered all documents and accepted the Business Loss at Rs.12,14,41,599.00 and allowed Unabsorbed Depreciation at Rs.2,15,94,618.00 to be carried forward to the subsequent years as per the Act.