https://www.taxtmi.com/caselaws?id=459087 The ITAT Mumbai dismissed the revenue's appeal regarding disallowance of brokerage and advertisement expenses. The tribunal held that interest expenses of Rs 15.04 crore could not be capitalized as no identifiable asset was purchased by the subsidiary company. Following Accounting Standard 16 and Section 36(1)(iii), interest on borrowings can only be capitalized when used for acquiring specific assets, not for general business purposes. The tribunal confirmed that since the loan was given for commercial expediency to a subsidiary, interest expenses should be allowed as business expenditure, consistent with previous years' treatment. en-us Tue, 06 Sep 2022 00:00:00 +0530 Fri, 29 Nov 2024 18:59:09 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=459087 The ITAT Mumbai dismissed the revenue's appeal regarding disallowance of brokerage and advertisement expenses. The tribunal held that interest expenses of Rs 15.04 crore could not be capitalized as no identifiable asset was purchased by the subsidiary company. Following Accounting Standard 16 and Section 36(1)(iii), interest on borrowings can only be capitalized when used for acquiring specific assets, not for general business purposes. The tribunal confirmed that since the loan was given for commercial expediency to a subsidiary, interest expenses should be allowed as business expenditure, consistent with previous years' treatment. Case-Laws Income Tax Tue, 06 Sep 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=459087