27 December 2010
The company had taken loans for purchasing land and doing construction on it amounting to Rs.150 Crores. It purchase land and due to some reasons (permissions, disputes etc) construction could not be started. So the idle funds were invested in Fixed Deposit.
Interest paid on loans taken Rs.10 lacs Interest received on FD Rs. 2 Lacs So Net Interest paid Rs.8 Lacs
Query related to above
1 Can the company set of the interest received against interest paid and capitalize 8 Lacs as capital WIP 2 If yeas quote some case laws for the same 3 If no than what are the tax implications on the above transaction
CAclubindia
