Interest on borrowed capital - Section 36(1)(iii)

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..... ect of capital borrowed for acquisition of new asset (Whether capitalized in the books of accounts or not) for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put to use, shall not be allowed as deduction. Hence such interest shall be added to the cost of asset. Conditions for claiming deduction under thi .....

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..... s deductible. Where the assessee firm created in favour of creditors of an erstwhile firm , it amounted to capital borrowed for business purposes and thus interest paid thereon was to be allowed as deduction. Interest on loan taken for payment to a retiring partner is allowable expenditure u/s 36(1)(iii). Not allowed Interest credited to a trust which was by mere book entries and there was no dive .....

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