Interest expenses on term loans for capital assets can be revenue expenditure per Section 36(1)(iii), clarifies Explanation 8 to Section 43A.

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....Disallowance towards interest expenses incurred on term loans - The loan having been utilized for acquisition of capital asset in the earlier years is thus not an obstacle for treating interest expenditure as revenue expenditure under s.36(1)(iii) of the Act r.w.s. Explanation 8 to s.43A of the Act. The CIT(A) has wrongly applied the tests laid down for applicability on Section 36(1)(iii) of the Act in its non-descript order. - AT....