Dear Members,
Suppose If a proprietorship concern had taken unsecured loans from family members and the amount has been used for capital Work in Progress and same has completed in current year.
But he will continue to pay interest to them in future years too till loan repament. In such a case, can he capitalize the interest for all future years i.e. each years interest to be capitalized every year. Also, Will this interest be considered as book value increment i.e. cost of improvement for computation of capital gain in future years. Or their should be other treatment for the same transaction.
Thank You.
CAclubindia
