Reliance Communications on Tuesday announced that the Hon’ble Supreme Court on Monday, 21st Nov. 2016, dismissed the Special Leave Petition filed by the Income-Tax Department against Reliance Communications on taxing of the proceeds of Foreign Currency Convertible Bonds (FCCBs), treating it as ‘unexplained cash credit’.
A Supreme Court bench of Justice Kurian Joseph and Justice Rohinton Fali Nariman passed the order dismissing the I-T Department’s Special Leave Petition, in relation to taxing of the FCCB proceeds, interest and derivatives income / loss thereon.
The Supreme Court order has quashed contingent tax liability of RCOM for about Rs 4800 crore. Earlier, the Income-Tax Appellate Tribunal and the Hon’ble Bombay High Court had also upheld RCOM’s appeal against the order of the Income-Tax Department.
During Financial Year 2006-07, Reliance Communications had issued FCCBs, as per the extant Guidelines of the Reserve Bank of India and applicable laws, aggregating US $1.5 billion (Rs 6,485 crore). The Income-Tax department took the view to assess the FCCB proceeds as ‘unexplained cash credits’ and had raised tax demands thereon. |