https://www.taxtmi.com/caselaws?id=37642 Interest on borrowings raised for a new plant under construction before commencement of production had to be capitalised as part of the plant's cost, and could not be deducted against interest earned from temporary deposit of the unutilised funds because the borrowing was not taken for the purpose of earning that income. The expenditure therefore lacked the necessary nexus with the interim interest income. Amounts spent on purchase of loom hours were also not treated as revenue expenditure deductible in assessment, as the issue was covered by an earlier binding decision. The Revenue's position was upheld on both points. en-us Fri, 25 Aug 1978 00:00:00 +0530 Wed, 31 Mar 2010 11:31:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=37642 Interest on borrowings raised for a new plant under construction before commencement of production had to be capitalised as part of the plant's cost, and could not be deducted against interest earned from temporary deposit of the unutilised funds because the borrowing was not taken for the purpose of earning that income. The expenditure therefore lacked the necessary nexus with the interim interest income. Amounts spent on purchase of loom hours were also not treated as revenue expenditure deductible in assessment, as the issue was covered by an earlier binding decision. The Revenue's position was upheld on both points. Case-Laws Income Tax Fri, 25 Aug 1978 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=37642