2002 (12) TMI 44

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..... nue and referred the following question of law in relation to the assessment year 1986-87 of the assessee: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in allowing depreciation on the capitalised amount payable in instalments, in respect of capitalised assets under the deferred payment scheme?" The assessee is a company and it has borrowed s .....

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..... sel for the Revenue, and Mr. Janardhana Raja, learned counsel for the assessee. Learned counsel for the assessee submits that on the facts of the case the seller has issued the bill which is for the entire amount and, therefore, no part of the amount is referable to the interest and the assessee is entitled to capitalise the entire interest. We are unable to accept the submission of learned counse .....

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..... nt paid by the assessee represents the interest payment, then it is not open to the assessee to capitalise the same and claim it as a part of the actual cost of the machinery for the purpose of depreciation on the said amount. This court in Coimbatore Pioneer Mills Ltd. v. CIT [1999] 236 ITR 69 and CIT v. India Pistons Ltd. [2000] 242 ITR 672 (Mad) has considered the scope of Explanation 8 to sect .....

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