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Disallowance of Loan Processing fees

This query is : Resolved 
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(Querist)
29 October 2009 dear all,

May i know whether loan processing fees is allowable. Plz do reply with case laws if any
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CA. Vinod Pandey

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CA. Vinod Pandey (Expert)
29 October 2009 As per section 2(28A) interest means interest payable in any manner in respect of any moneys borrowed or debt incurred and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised.
Further, in case of "India Cement Ltd Vs CIT" in which SC held that expenditure incurred to obtain loan can not be capitalised. But did not disallow. hence it can be claimed.
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CA SANJAY MUKHERJEE

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CA SANJAY MUKHERJEE (Expert)
29 October 2009 Agree with expert, processing fee is allowable expenditure.
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Hirachand Chheda

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Hirachand Chheda (Querist)
29 October 2009 thank you very much for your response
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CA. Gurdeep Singh Chawla

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CA. Gurdeep Singh Chawla (Expert)
29 October 2009 Allowable expense.
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