AS - 16 Practical Difficulty

If other conditions as mentioned in AS 16 relating to capatilsation of borrowing cost are satisfied then interest on FITL must be capitlaised.

Thanks Munjal...Is there any clarification or notification in this regard because we are doing it the other way...We are treating it Revenue Expense..

There is no notification or clarification in my knowledge. However looking at the substance of the transaction (1) it is a term loan (2) it is utilised for qualifying asset and (3) Interest will be paid on such non repayment of loan. So in my view there is no reason for you to charge it to revenue account.