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vii) Therefore the order of the Ld. CIT(A) deserves to be deleted and that of the AO restored.

viii)Any other ground that may be urged at the time of hearing.

3. Briefly stated, the relevant material facts are like this. The assessee had two series of foreign currency convertible bonds (FCCB) in financial year 2007-08. The FCCBs so issued, amounting to US $ 300 millions, were to mature in June 2012, and FCCBs of US $ 200 millions were to mature in October 2012. These FCCBs were restructured in May 2009 and, accordingly, zero coupon FCCB amounting to USD $ 9,40,04,000 were replaced with 7.50% interest bearing FCCB amounting to US $ 5,63,88,000.

14.3 After going through rival submissions and material on record, we find that assessee had issued two series of Foreign Currency Convertible Bonds (FCCB) in F.Y. 2007-08, namely, FCCB for US $ 300 millions maturing in June 2012 and another FCCB for US$ 200 millions maturing in October 2012. The proceeds of subject FCCB were used for acquisition of shares in overseas subsidiary which is carrying on business outside India resulting in source of income outside India. The bonds have been issued under the permission of Reserve Bank of India under External Commercial Borrowing (ECB) guidelines. Assessee carried out restructuring of subject FCCB in May 2009 with permission of Reserve Bank of India and as a part of it and as a DDIT (Intl Tax) vs. Suzlon Energy Ltd Assessment Year : 2011-12 part of it assessee replaced Zero coupon FCCB amounting to US$ 9,40,04,000/- with 7.50% interest bearing FCCB amounting to US$ 5,63,88,000/-. As a part of restructuring assessee company has made payment to non- resident bond holders on account of consent incentive for change in financial covenants of FCCB amounting to Rs.68,70,18,465/- through Deutsche Bank AG London Branch. Assessee company has also remitted interest on the said FCCB's amounting to Rs.10,63,50,697/- to non- resident bond-holders through Dutsche Bank AG London Branch. However, Assessing Officer passed the order invoking provisions of Section 201(1)/(1A) of Act after holding that assessee was liable to deduct tax at source u/s.196C r.w.s. 115AC of the Act on remittance made by assessee. Assessing Officer gave following reasoning while passing order:

14.5 From detailed submission in this regard, we find that assessee has issued two series of Foreign Currency Convertible Bonds ('FCCB") in F.Y:

2007-08 namely; FCCB for US$ 300 Millions maturing in June 2012 and another FCCB for US$ 200 Millions maturing in October 2012. We find that proceeds of subject FCCB were used to be used and as a matter of fact used, for acquisition of shares in overseas subsidiary which was carrying on business outside India resulting in source of income outside India. We also find that the bonds have been issued under the permission of Reserve Bank of India under External Commercial Borrowing ('ECB') guidelines. However, due to financial constraint, assessee carried out restructuring of subject FCCB in May 2009 with the permission of Reserve Bank of India and pursuant to the same, assessee replaced Zero coupon FCCB amounting to US$ 9,40,04,000/- with 7.50% interest bearing FCCB amounting to US$ 5,63,88,000/-. As a part of restructuring of assessee company has made payment to non-resident bond holders on account of 'consent incentive' for changes in the financial covenants of the Foreign Currency Convertible Bonds amounting to Rs.68,70,18,465/- through Deutsche Bank AG London Branch. Assessee company had also remitted interest on said FCCB's amounting to Rs.10,63,50,697/- to the non- resident bond-holders through Deutsche Bank AG London Branch. Now, the question is whether these payments are subject to tax in the hands of the recipient Non-Residents? If the answer is in affirmative, the assessee is under an obligation to deduct tax at source and if the answer in negative, the assessee cannot be held liable to deduct tax and consequently, the orders u/s 201(1)/(1A) has to be quashed.

(a)Adani Enterprise had issued FCCB in (a) The assessee has issued FCCB in New York and the proceeds from FCCB London and the proceeds of such were used for making overseas direct FCCBs were utilized for the purpose of investment in its Singapore subsidiary investments and acquisition of foreign such as Adani Shipping PTE Ltd., Adani subsidiaries outside India through Global PTE Ltd. etc.; foreign subsidiaries;

(b) Adani remitted interest to the Bank      (b)The assessee remitted the amount
of New York, Mellon towards the              due on account interest and consent
interest payable on FCCBs issued by          incentives to Deutsche Bank AG,
Adani.                                       London Branch as its agent to distribute
                                             the interest and consent incentive
                                             amount; which in turn gave to Deutsche
                                             Trustees Co Limited London who stood
                                             nominated as the trustee of the bond
                                             holders and the said trustee made the
                                             payment in foreign currency to the
                                             clearing system where individual bond
                                             holders are having accounts.
(c) Tribunal in its order on pg. no. 14      (c) In the present case also the AO on
vide para 11 has reproduced the para         pg. no.9 vide para 6.1.4 has passed the
4.7 of AO's order, which shows that AO       same observations as noted in para 4.7
was of the view that the Bonds were          of Adani Enterprise Ltd. order. In the
issued by an Indian Company and              present case also, AO was of the view
interest has been paid by an Indian          that the Bonds were issued by an Indian
Company from India only and further the      Company and interest has been paid by