capitalisation of exp


This query is : Resolved 

(Querist)
06 August 2008 the exchange rate differece relating to foreign currency liability incurred in relation to fixed assets.

1.what is the treatment of above transaction as per co.act

2.wat is its treatment as per IT act.is it an allowable exp.

06 August 2008 As per companies act,1956 if there is an increase/decrease in the amount of loan taken for the purpose of acquisition of fixed assets due to exchange rate fluctuation , then the cost of the fixed asset will be increased/decreased also by the same amount and this new increased value will be considered as cost of acquisition.
As per income tax act i have no idea.


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