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Capiatalisation of finance charges

This query is : Resolved 
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(Querist)
26 November 2012 vehicle value 45 lakhs
down paymnt 5 lakhs
loan taken 44 lakhs
excess of 4 lakhs ( 45-4) is fiance charges so hw can i capitalise .
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CA Pooja Agarwal

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CA Pooja Agarwal (Expert)
26 November 2012 finance charges cannot be capitalised...
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CA Siddhartha Bhardwaj

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CA Siddhartha Bhardwaj (Expert)
26 November 2012 Yes in this case finance charges CANNOT be capitalised since the asset is not a qualifying asset as per AS 16.

The finance charges shall be allowed as deduction every year.
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CA Ravi Kumar

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CA Ravi Kumar (Expert)
26 November 2012 Yes, Finance charges cannot be capitalised...
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