representing discount on buy back on Foreign Currency
Convertible Bonds ("FCCB")
2
ITA No.3402/Del./2016
1.1 That the learned Assessing Officer ... failed to appreciate that the loan raised
by way of FCCB was for capital purposes and therefore any discount on buy
back is capital receipt
section 35D on issue of
Foreign Currency Convertible Bonds (in short "FCCB"). The
said sum was disallowed ... reason that FCCB
are not on account of any public issue and only qualified
institutional investors are offered the bonds. The A.O./DRP
have
under normal provisions in view of the following
additions/disallowances: -
i) FCCB issue expenses `28,58,28,246/-
ii) Legal and professional fees ... deduction of withholding tax on interest
payments on FCCB ` 3,35,70,044/-
2.2 Aggrieved by the order of the assessment
amount
claimed as deduction pertaining to raising of Foreign Currency
Convertible Bonds (FCCB) as revenue expenditure were not
allowable and required to be capitalized because ... FCCB was
raised with the purpose of being required for working capital
whereas the same was used in a manner contrary to permitted
interest of Rs. 57,98,000/- on
foreign currency convertible bonds (FCCB).
b) Restriction of claim of Bank interest and finance charges ... Bank Interest.
Further, the assessee also submitted a copy of the FCCB loan
account and also the interest on FCCB account. A copy
electronic contract
notes, copy of the issue of Foreign Currency Convertible Bonds (FCCB)
and ordinary shares (through Depository Receipt Mechanism) scheme
1993, dealing with ... holders as
a normal equity share of the company, while FCCB is an instrument
wherein the return is fixed by way of an interest payment
reimbursement of expenses received by the
assessee for issue of GDR/FCCB etc. from Indian companies is not taxable as fees for
Technical Services under ... being sub-
(i) All receipts on account of issue of GDR & FCCB are in the nature of normal fund
for the issuing company
also replied as not germane in the
context of GDR/ FCCB issues.
(f) there was no payment from Indian company to the non-
resident company
also replied as not germane in the
context of GDR/ FCCB issues.
(f) there was no payment from Indian company to the non-
resident company
Ghcl Limited, Ahmedabad vs The Dy.Cit., Circle-4,, Ahmedabad on 5 March, 2021
IN
