Allowability of Loan Processing Charges

HEMENDRA TAILOR (SR. MANAGER) (32 Points)

11 September 2009  
As per proviso to Sec-36(1)(iii) of IT Act Interest expense upto date on which assets are put in use to be capitalised but this clause not speaks about Processing Charges paid at the time of sanction of loan. Whether processing charges are allowable as deduction in the year of expenditure incurred or to be capitalised with relevant asset/project.