int on loan

If Company incurrs interest on loan, then it depends on the purpose of availing of loan, for example lf company has raised a loan for acquiring or constructing building, then it should be capitalised in the cost of construction. (You may refer the Definition of Qualifying Asset as per AS-16)

Whereas, if the company raises a loan for working capital expansion i.e, Cash Credit Limit, then interest  on such CC should be expensed in the P/L Account.

                                                    Thanks         

                                                                                                       -----------CA Rajan Ali, Ambala