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Archit Jain (Practicing CA)     09 February 2009


as per the section in case a business is existing

And asset is purchased for expansion of existing business… as per proviso no deduction shall be allowed in respect of any amount of interest paid , In respect of capital borrowed for acquisition of a new asset for expansion of the business ( whether capitalized in books or not) and where such amount of interest paid is for the period beginning from the date on which the capital was borrowed for for acquisition till the date on which such asset is first put into use………..
Plzzz clrify this section n tell me y interest cannot be allowed when an asset is purchased for expansion,……………

 1 Replies

CA. Ashok shah

CA. Ashok shah (CHARTERED ACCOUNTANT)     09 February 2009

Only the portion of the interest liability pertaining to period till the asset is put into use is not allowable if the capital is borrowed for acquiring a capital assets. Thereafter, it is allowable. [(Sec.36 (1) (iii)]

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