Infrastructure Lender Wins Tax Relief: Section 36(1)(viii) Deduction Allowed for Loans, FCCB Expenses, and Club Fees

The ITAT delivered a comprehensive ruling addressing multiple tax issues. The key outcome was favorable to the taxpayer on several counts: deduction under section 36(1)(viii) was allowed for infrastructure loans and securitization income; disallowance under section 14A was restricted due to sufficient owned funds; club membership fees were deemed revenue expenditure; FCCB issue expenses were allowed as revenue expenditure; and penalty under 271(1)(c) was deleted. The Tribunal rejected pro-rata allocation for section 80M dividend deduction and upheld the taxpayer's right to set off short-term capital losses against higher-taxed gains. For bad debts claims, verification was directed to ensure linkage with provisions created up to March 31, 2016. The ruling maintained consistency with established precedents while providing specific guidance on technical aspects of various provisions. .....

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