Section 36(1)(iii), read with section 147, of the Income-tax Act, 1961 - Interest on borrowed capital

IT : Assessing Officer having allowed deduction in respect of assessee's claim for payment of interest, could not initiate reassessment proceedings merely on basis of change of opinion that interest expenditure in question was capital in nature
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[2015] 54 taxmann.com 70 (Bombay)
HIGH COURT OF BOMBAY
Business India
v.
Joint Commissioner of Income-tax, 12 (1)*
M.S. SANKLECHA AND N. M. JAMDAR, JJ.
WRIT PETITION NOS. 1360 & 1526 OF 2006
SEPTEMBER  22, 2014
Section 36(1)(iii), read with section 147, of the Income-tax Act, 1961 - Interest on borrowed capital (Reassessment) - Assessment years 1998-99 and 1999-2000 - Whether where Assessing Officer allowed assessee's claim for deduction of payment of interest in absence of any failure on assessee's part to disclose fully and truly all material facts necessary for assessment, he could not initiate reassessment proceedings merely on basis of change of opinion that interest expenditure in question was capital in nature - Held, yes [Para 11] [In favour of assessee]