JCIT(OSD), RANGE-10, NEW DELHI , C.R. BUILDING ITO vs. RURAL ELECTRIFICATION CORPORATION LTD. , KASTURBA NAGAR

ITA 579/DEL/2025Status: DisposedITAT Delhi12 February 2026AY 2021-2242 pages
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What did the Tribunal hold?

The Tribunal held that processing fees and upfront charges received by the assessee have a direct nexus with their business of providing long-term finance. Therefore, these incomes are eligible for deduction under Section 36(1)(viii) of the Act, as supported by various judicial precedents.

What were the facts?

The assessee, Rural Electrification Corporation Ltd., claimed deductions under Section 36(1)(viii) of the Income Tax Act on processing fees and upfront charges related to long-term loans. The Assessing Officer disallowed these deductions, arguing they were not derived from the long-term finance business as some loans were repaid before five years. The assessee contended that these fees had a direct nexus with their long-term finance business.

What were the issues?

Whether processing fees and upfront charges related to long-term loans are eligible for deduction under Section 36(1)(viii) of the Income Tax Act when the loans may be repaid before the stipulated five-year period.

Which sections of the Income-tax Act were involved?

Section 36(1)(viii)

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Cases cited in this judgment(5)Show list

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Heard together (6 matters)

ITA No.319/Del/2025
ITA No.320/Del/2025
ITA No.577/Del/2025
ITA No.578/Del/2025
ITA No.609/Del/2025
ITA No.579/Del/2025

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IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘B': NEW DELHI. BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIAL MEMBER REC Limited, C/o D-22, Second Floor, South Extension 1, New Delhi – 110 049 ITA No.320/Del/2025 (Assessment Year: 2019-20) VS. ACIT – 10 (O ), Delhi. (PAN :AAACR4512R) JCIT – 10 (O ), Delhi. ITA No.578/Del/2025 (Assessment Year: 2019-20) VS, Rural Electrification Corporation Ltd., Core-4, Scope Complex, Kasturba Nagar, 7 Lodhi Road, East Delhi 110003 (PAN : AAACR4512R) (APPELLANT) (RESPONDENT) ASSESSEE BY: Shri Ashwani Taneja, Advocate Shri Shivam Kukreja Advocate Shri Shantanu Jain, Advocate Shri D. Dubey, Advocate Ms. Ria Jain, Advocate REVENUE BY : Ms. Pooja Swroop, CITDR ITA Nos.577& 578/Del/2025 ITA Nos.609& 579/Del/2025 ITA No.579/Del/2025 (Assessment Year: 2021-22) JCIT – 10 (O ), Delhi. VS, Rural Electrification Corporation Ltd., Core-4, Scope Complex, Kasturba Nagar, 7 Lodhi Road, East Delhi 110003. (PAN : AAACR4512R) (APPELLANT) (RESPONDENT) ASSESSEE

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