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2019 (3) TMI 1027 - AT - Income TaxExemption u/s 10(23FB) - assessee is a Venture Capital Fund [VCF] - investments in Convertible Debenture application money - violation of SEBI (Venture Capital Fund) Regulations - dividend income earned from the units of Mutual Funds as well as on equity shares of a VCUs [Venture Capital Undertakings] - HELD THAT:- So far as VCF Regulations of SEBI are concerned, we are in agreement with the assessee that it does envisage investments in Convertible Debenture application money as being investments which can be said to be linked to investment in equity shares. Thus, on account of the aforesaid discussion, we find that the assessee fulfils the requirements of claiming exemption under Section 10(23FB) of the Act so far as it is relatable to the year under consideration. Assessee is a VCF operating in terms of a Trust Deed registered under the provisions of the Registration Act, 1908; that it has been granted a Certificate of Registration as VCF by SEBI which continues to subsist; that there is no adverse action taken or contemplated by SEBI for violation of any VCF Regulations; that the targeted investment in VCUs is within the purview of VCF Regulations of SEBI; that assessee is permitted by its Trust Deed as well as by the VCF Regulations of SEBI to temporarily deploy funds in units of mutual funds as well as in Convertible Debenture application money. Thus, in our view, assessee is entitled to exemption envisaged under Section 10(23FB) of the Act. - Decided in favour of assessee.
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