OFCDs cannot be equated with ‘loan’ or ‘deposit’ U/s. 269SS

Optionally Fully Convertible Debentures (OFCDs) do not fall under and cannot be equated with receipt of ‘loan’ or ‘deposit’ under the provisions of Section 269SS of the IT Act, evidently, no violation of the said Section can be said to have been committed by the assessee to attract penalty u/s 271D.

The Company has received subscription through private placement in respect of Optionally Fully Convertible Debentures and the same shown in the balance sheet under the head “loan & advances”,

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