10 August 2010
Facts of the case are- 1- R.F.'s assets comprise Land & Building. 2-Land & building is revalued & asset a/c is debited & partners capital a/cs are credited by the amount of revaluation amount. 3- The Firm proposes to pay interest on capital account of partners,which includes revaluation of land & building.
Whether interest paid to partners on the amount of revaluation will be an allowable expenditure?
10 August 2010
Since depreciation on increased value of assets on revaluation is not allowed, similarly interest on capital increase on such account may not be available.
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