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2022 (9) TMI 1114 - AT - Income TaxExpenses of FCCB - allowable capital or revenue expenditure - As regards the submissions before the CIT(A), the assessee stated that the issue of FCCB is a Foreign Currency Bond issue and it is basically a debt instrument in the nature of loan and all issue expenses related to that are allowable as revenue expenses - HELD THAT:- After perusal of the records, it can be seen that the assessee though issued foreign currency convertible bonds the same are basically debt instrument and though the decision in case of Secure Meters was related to the issue of fully convertible debentures, the same cannot be totally differentiated as the conditions in regard to FCCB about conversion price, conversion price reset, adjustment to conversion price, redemption of bonds in the event of de-listing and etc. will have very limited bearing while opting for conversion into ordinary equity shares as per the records. The assessee has given details as regards to computation of income for expenses on issue of FCCB, security premium on redemption of FCCB and interest booked under FCCB expenses and initial conversion price of Rs.130/- per share from the issue date and until 14.10.2012 was defined by the assessee. Mere reference on the decision by the CIT(A) cannot be called as not deciding the case on merit. CIT(A) has taken proper cognisance related to various terms offered for raising funds though FCCB into convertible bond of ordinary equity shares and thus ratio of Secure Meters [2008 (11) TMI 66 - HIGH COURT RAJASTHAN] squarely applied in assessee’s case by the CIT(A). Appeal of the Revenue is dismissed.
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