Expenses for Aborted IPO Deductible Under Section 37, Following Nimbus Communication Precedent

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....The ITAT ruled that expenses related to an aborted Initial Public Offering (IPO) are deductible under s.37 of the Income Tax Act, following the precedent set in Nimbus Communication Ltd. While share issue expenses are generally capital in nature and non-deductible under s.37 (except as permitted under s.35D), the Tribunal distinguished between completed and abandoned capital projects. The ITAT held that aborted share issue expenses qualify for business deduction, setting aside the CIT(A)'s finding and directing the Assessing Officer to delete the addition to the extent related to the assessee's equity base increase, excluding expenses pertaining to the Offer For Sale (OFS) by promoters. The assessee's appeal was allowed.....