1987 (8) TMI 161

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....ed here as it involves minor issue.] 2. The first common point in dispute relates to the capitalisation of the interest charges arising from the purchase of plant and machinery under deferred payment terms. The assessee had purchased a plant and machinery for setting up a new industrial undertaking in respect of which the ITO has granted relief u/s. 80J and hence the question whether it is a ne....

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....e Explanation states that "for the removal of doubts it is hereby declared that where any amount is paid or is payable as interest in connection with the acquisition of an asset, so much of such amount as is relatable to any period after such asset is first put to use shall not be included, and shall be deemed never to have been included, in the actual cost of such asset. " The memorandum explaini....

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....set for the purposes of claiming depreciation, investment allowance, etc., under the Income-tax Act. As this was never the legislative intent nor does it conform to accepted accounting practices, with a view to counteracting tax avoidance through this method and placing the matter beyond doubt, the Bill seeks to provide that any amount paid or payable as interest in connection with the acquisition....