Held that interest expenses incurred by assessee till date of commissioning of power production i.e. prior to use of assets, was to be capitalized to cost of asset in terms of Explanation 8 to section 43(1) of the Act. Interest expenses incurred after commencement of power production i.e. post assets were put to use, was to be allowed as revenue expenditure. (AY. 2013-14)
ACIT v. India Power Corporation Ltd. (2021) 191 ITD 250 (Kol.)(Trib.)
S. 37(1) : Business expenditure-Funds borrowed for setting up a thermal plant-Interest expenses till date of commissioning of power production i.e., prior to use of assets, was to be capitalized to cost of asset-Interest expenses incurred after commencement of power production-Allowable as revenue expenditure. [S.43 (1)].