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Boost For Private Debt Players

Published on Mon, Oct 27,2014 | 17:57, Updated at Mon, Oct 27 at 17:57Source : 

In a decision which further incentivizes structured leverage transactions, the Bangalore bench of Income Tax Appellate Tribunal (“Tribunal”) in Alliance Infrastructure Projects v. DCIT1 has held that interest expenditure incurred on borrowed funds which are invested in the shares of a company cannot be disallowed unless the entity claiming such expenditure is in actual receipt of tax exempt income. The decision is a major shot in the arm for debt structured investments and importantly, comes at a time when the investment climate in India is on the rise. Attached is the analysis of the ruling by Nishith Desai Associates.

Attachments : Boost_for_private_debt_players__No_interest_disallowance_on_borrowed_funds_used_for_equity_investments_till_receipt_of_dividends.pdf

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