capital exp., Income Tax

[himanshu gupta]

interst paid on purchase of land after startd of production is capital exp. or rev. exp. 

if its a rev. exp. then suggest proper case law or sec.

Posts / Replies

[CA GOPALJI AGRAWAL]

The basic principles of accounting decide whether an expenditure is revenue or capital. AS 16 on borrowing costs reply yr query that once the asset is ready to use, the subsequent costs are revenue but in income tax law, it is the date the asset is put to use hence once the production is started, the expense is revenue on account of interest.