TUF Scheme

Dear Sir,

Pls specify  how the interest paid in FY 2007-08 & 2008-09 was treated.. Was it capitalised? or was claimed as revenue expenditure u/s 36???

If revenue -

In Books  it will treated as "other income" & will be shown separately in the Profit & Loss A/c.

In income tax - taxable item under PGBP u/s 41(1).

If capital -

In books - it should be credited to that fixed asset account in which earlier it was debited & moving on depreciation shall be charged on revised amount.

In income tax - I dont think Explanation 10 to sec 43(1) i:e Actual cost can be applied in this case since it is to be reduced from actual cost & not from WDV. So I think in this case it would be a "tax free receipt"....