respect of capitalization of
professional fees capitalized of certain expenses, FCCB Premium and
FCCB Issue Expenses,"
5. "On the facts ... erred in deleting the addition by way of disallowing FCCB
Premium."
6. "On the facts and in the circumstances of the case
expenditure on non-
convertible debentures of ₹.39.61 crores and interest expenditure on
FCCB of ₹.27.57 crores to tonnage business. Ld. Pr.CIT further observed ... related to NCD and FCCB respectively, which should have been
allocated to tonnage as well as non-tonnage business in the ratio of turnover
Ordinary
Shares (Through Depositary Receipt Mechanism) Scheme, 1993
(for short "FCCB Scheme") to Lehman Brothers.
6 The FCCB Scheme was notified ... ASWP(ST)19262.18.doc
The relevant clauses of the FCCB Scheme that require
consideration in the matter are reproduced below
confirming premium of
Rs. 1,75,72,704/--payable on redemption of FCCB
Bonds wrongly holding the same to the in the nature of
capital ... redemption of Foreign Currency
Convertible Bonds(in short referred to as 'FCCB')
amounting to Rs.1,75,72,704/-.
6. Brief facts relating
funds equivalent to US $ 300 million by
issuing Foreign Currency Convertible Bonds (FCCB), vide circular dated
12.10.2006. The report was received from Directorate of Intelligence ... based on investigation carried out by SEBI,
wherein it was found that FCCB money of ADA group companies including the
assessee had been used
action of the
AO/TPO in disallowance of premium on redemption of FCCB. For this
assessee has raised following ground No. 5 as under ... Ground 5- Premium on Redemption of
FCCB
5.1 The Ld. DRP/AO erred in law and
facts in disallowing of premium on
redemption of FCCB
account of discount received on FCCB buy
back without appreciating that the said discount received was taxable as revenue
receipts ... account of discount received on Foreign Currency
Convertible Bonds [FCCB] buyback. During assessment proceedings, it
transpired that the assessee reduced its business income
found that the assessee has
issued "Foreign currency convertible bond (FCCB)" aggregating to 18
million US dollars ... first phase, 9000 FCCB were
issued. For raising the fund through the FCCB, the assessee company had
incurred expenditure
disallowance of premium payable on redemption of
Foreign Currency Convertible Bonds (FCCB) by treating the same as
capital expenditure.
4. At the outset ... 2015, 483/2016 and 518/2016 dated
14.3.2019 holding the premium on FCCB bonds to be
revenue in nature. Reliance was also placed
submitted that foreign exhange
loss on zero coupon FCCB Rs. 195.07 crore, and on HSBC loan 51.81
crores are of both capital and revenue purposes ... capital purpose loss on
FCCB loan is 164.96 crores loan is 49.04 crores and on HSBC loan is 49.04
Crores.
21.5. From the balance sheet
