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| The Tax Publishers2020 TaxPub(DT) 0981 (Del-Trib) INCOME TAX ACT, 1961
Section 28(iv)
Where the assessee got benefit due to buy-back of FCCB in money terms then the said benefit could not be held as taxable even under section 28(iv). On a plain reading of section 28(iv) prima facie, it appears that for applicability of said provision, the income which can be taxed shall arise from business or profession. Also, benefit which is received has to be in some other form rather than in shape of money.
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Business income - Benefit or perquisite under section 28(iv) - Discount on buy back of FCCBs -
Assessee raised Rs. 40 crores by way of issue of Foreign Currency Convertible Bonds (FCCB) in financial year 2007-08 relevant to assessment year 2008-09 from two overseas entities. During previous year relevant to concerned assessment year, assessee bought back FCCB at a discount of 24% on face value of the FCCB. According to AO, funds were raised through FCCB by assessee with clear motive to earn profit from discount on buy-back of FCCB and thus, essentially discount on FCCB was a trading receipt taxable under section 28(iv). Held: On a plain reading of section 28(iv) prima facie, it appears that for applicability of said provision, the income which can be taxed shall arise from business or profession. Also, the benefit which is received has to be in some other form rather than in shape of money. In the instant case, benefit had been received in the shape of money and thus, said benefit could not be held as taxable even under section 28(iv).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
INCOME TAX ACT, 1961
Section 40(a)(ia)
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