24 January 2013
dear expart first thanks to you for replies but sir but sec 36(1)(iii)said intarest paid on borrowed capital used for the business allowed as deduction but capital borrowed for acquirng capital assets, and intarest liablity on loan till the assets put to use cannot allowed as deduction from assessment year 2004-2005. here car is a capital assets. am I right or wrong, sir please clear to me. thanks.....
24 January 2013
you are right. until the asset is put to use you will have to capitalise. In most cases a vehicle is put to use immediately once acquired and hence i had not elaborated on the point. So interest liab. post putting into use of the vehicle is certainly allowable
CAclubindia
