Dismissing the appeal of the revenue the Tribunal held that when the inventories held as current assets interest paid on borrowed capital is allowable as deduction as the method of accounting followed by the assessee is in accordance with Accounting Standard 2 . ( AY.2008-09)
Dy. CIT v. Thermo King India Pvt. Ltd. (2020)82 ITR 42 (SN)(Bang) (Trib)
S. 36(1)(iii) :Interest on borrowed capital -Inventories held as current assets —Method of accounting – Accounting Standard 2 — Interest expenses allowable as deduction .[ S.145A ]