Disallowance of Loan Processing fees
This query is : Resolved
Hirachand Chheda
(Querist)
29 October 2009
dear all,
May i know whether loan processing fees is allowable. Plz do reply with case laws if any
May i know whether loan processing fees is allowable. Plz do reply with case laws if any
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.
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.
CA SANJAY MUKHERJEE
(Expert)
29 October 2009
Agree with expert, processing fee is allowable expenditure.
Hirachand Chheda
(Querist)
29 October 2009
thank you very much for your response
29 October 2009
Allowable expense.
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