820/CBDT.

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....st of machinery etc. for the purpose of allowing depreciation and development rebate. In the case of M/s.Standard Vacuum Refining Co. (now known as Hindustan Petroleum Corporation), Calcutta, High Court had answered the reference in favour of the assessee and against the Department. In the case of Challapalli Sugar Mills the A.P. High Court had answered the reference in favour of the Department an....

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....ng 11th Edition pages 190-191. The Court further referred to section 203(1) of the Companies Act, 1956 as also to paras 2.22 and 2.5 of the Statement on Auditing Practices issued by the Institute of Chartered Accountants of India, 1974. The Court held:- " It would appear from the above that the accepted accountancy rule for determining the cost of fixed assets is to include all expenditure nece....

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....tion of any work or building or the provisions of any plant in contingencies mentioned in that section even though such money constitutes share capital. The Court held that the same principle should hold good if interest is paid on money not raised by way of share capital but taken on loan for the purpose of defraying the expenses of the construction of any work or building or the provisions of an....