1987 (8) TMI 161

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..... spute relates to the capitalisation of the interest charges arising from the purchase of plant and machinery under deferred payment terms. The assessee had purchased a plant and machinery for setting up a new industrial undertaking in respect of which the ITO has granted relief u/s. 80J and hence the question whether it is a new unit is not in dispute before us. The assessee claimed that the inter .....

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..... red that where any amount is paid or is payable as interest in connection with the acquisition of an asset, so much of such amount as is relatable to any period after such asset is first put to use shall not be included, and shall be deemed never to have been included, in the actual cost of such asset. " The memorandum explaining this amendment states as follows : "Actual cost" for the purposes .....

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..... under the Income-tax Act. As this was never the legislative intent nor does it conform to accepted accounting practices, with a view to counteracting tax avoidance through this method and placing the matter beyond doubt, the Bill seeks to provide that any amount paid or payable as interest in connection with the acquisition of an asset and relatable to a period after the asset is first put to use .....

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