Dy. CIT Vs Reliance Natural Resources Ltd. (ITAT Mumbai)
In the case of Prime Focus Ltd., the Tribunal observed that the FCCB is akin to borrowings made by issuing debentures and both of them are different types of debt instruments only. Accordingly it was held in the case of Prime Focus Ltd. (supra), that the expenses incurred in connection with FCCB are revenue in nature. The Tribunal in the instant case, further noticed that FCCB holders never had any voting rights as the same were not converted into equity shares of the company during that year. In view of these facts, the Coordinate Bench held that the expenditure incurred by the assessee in connection with the issue of FCCB is Revenue in nature.
RELEVANT EXTRACT OF ITAT JUDGMENT
These cross appeals are directed against the order dated 6-8-2012 passed by the learned Commissioner (Appeals)-13, Mumbai and it relate to assessment year 2009-10.
2. The assessee is engaged in the business of providing fuel and facilitation services in various forms to power plants and is also engaged in the joint venture operations for exploration and production of coal based Methane blocks.
3. We shall first take up the appeal filed by the Revenue. The assessee claimed following expenses, which were incurred in connection with the issue of foreign currency convertible bonds (FCCB).
