2016
Assessment Year: 2012-13
coupon 'foreign currency convertible bonds' (FCCB) of USD 275 million with
the tenure of five years redeemable ... redeemed @ 139.37% of the principal amount. As per the terms the FCCB
holders had an option to get the bonds converted into equity shares with
acquisition of overseas companies and
invested its holding Part of the FCCB was utilized for the
investment in EEMF, where applicant is not director ... have not come across
any contravention of FEMA guidelines in respect of FCCB's
issued by company. Learned advocate also pointed out summary
That the learned CIT(A) erred in upholding the disallowance
towards FCCB expenditure of Rs. 7,30,66,667/- which is not
correct ... loss of Rs. 21,92,00,000/- on
foreign currency convertible bonds (FCCB) and therefore
the company has restated the bonds at the exchange rates
being expenses incurred on issue of foreign currency
convertible bonds ('FCCB') holding the same to be capital in nature.
10. That the assessing ... pertaining to
amortisation of premium payable at the time of redemption of FCCB, holding
the same to be unascertained and contingent in nature
account of disallowance of expenditure incurred towards foreign currency convertible
bonds (FCCB) which was essentially a foreign currency loan for the purpose of
business ... total expenditure incurred towards FCCB
having held that expenditure incurred is in the nature of capital expenditure as it was
incurred for the purpose
disallowed in light of failure to establish the
genuineness of FCCB funds in the first place.
2. The CIT (A)'s order is contrary ... thereby making
additions in the normal computation of income on account of
FCCB issue expenses and interest on FCCB.
Aggrieved by the order
Strides Arcolab Ltd, Navi Mumbai vs Asst Cir 10(3), Mumbai on 8 June, 2018
loss of Rs. 21,92,00,000/-
on foreign currency convertible bonds (FCCB) and
therefore the company has restated the bonds at the
exchange rates ... signatory), has considered the issue as to whether the
FCCB issue expenses are in the nature of capital or
Revenue and has held as under
under the scheme of issuance of FCCBs, as the identity of the
FCCB holder is generally not known to the Domestic Custodian Bank,
therefore ... grant of credit for taxes deducted at source on
interest received on FCCB's during the year under consideration. We,
therefore, restore the issue
Assessee it seems has raised 25 Mn. Dollars by
issue of FCCB Bonds with a coupon rate of 7.25% P.A. and 50
Mn. Dollars ... which
is not correct and justified. It was further submitted that FCCB
funds were received by Bank of Baroda, Offshore Branch,
Singapore and the same
