capitalisation of Interest on short payment of custom duty

This query is : Resolved

YOGESH GUPTA (Querist)
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03 October 2008 sir

Please suggeset whether we should capitalise the interest on short payment of custom duty on import of machine.

Regards

Yogesh gupta

CA V. Mohanakrishnan

CA V. Mohanakrishnan (Expert)
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03 October 2008 the same needs to be capitalised since the same is directly linked to the machine

YOGESH GUPTA

YOGESH GUPTA (Querist)
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04 October 2008 Sir

I think it would be teated as penal interest and whether any penal interest could be capitalised. If penal interest is not a deductable expenditure so how the same can be capitalised.

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S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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04 October 2008 The disallowave of penal interest is asper IT Act. This has nothing to do with treatment as per accounting principle. These two are different aspects.