Search Results For: S. V. Joshi


Natural Gas Company Pvt. Ltd vs. DCIT (ITAT Mumbai)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , , , , ,
COUNSEL:
DATE: May 22, 2015 (Date of pronouncement)
DATE: June 2, 2015 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
(i) S. 48: Interest paid on moneys borrowed to acquire assets cannot be treated as the 'cost of acquisition' of the asset, (ii) S. 41(1): Unclaimed liabilities are deemed to have been remitted/ ceased and are taxable in the year of discovery by AO

The interest cost is toward the retention of the borrowing and, concomitantly, the retention or the holding of the asset under reference, i.e., is a function of the holding period. It is, thus, rightly described as a holding cost or a period cost, depending upon how one may look at it. This difference is again of relevance in-as-much as the asset may be sold/realized without the repayment of the debt, so that the interest cost continues independent of the asset. Again, the debt may be repaid/liquidated, extinguishing the interest cost, while the holding of the asset continues. That is, even the holding cost relationship is not automatic or follows as a natural corollary. The two, i.e., the interest cost and cost of the asset, are in any case independent of each other

Top