PH4 FOOD AND BEVERAGES PRIVATE LIMITED ,BENGALURU vs. DCIT CENTRAL CIRCLE 1(3) , BENGALURU

ITA 242/BANG/2026Status: DisposedITAT Bangalore31 August 2026AY 2021-2214 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that FCCDs, which are convertible into equity shares at a future date, cannot be equated with the issue of equity shares for the purpose of Section 56(2)(viib) of the Act. Therefore, the consideration received against such FCCDs is outside the scope of this section.

What were the facts?

The assessee company issued equity shares and Fully and Compulsorily Convertible Debentures (FCCDs) at different valuations. The Assessing Officer (AO) added the excess amount received on FCCDs to the assessee's income under Section 56(2)(viib) of the Income Tax Act, treating it as income from other sources.

What were the issues?

Whether the provisions of Section 56(2)(viib) of the Income Tax Act are applicable to the issuance of Fully and Compulsorily Convertible Debentures (FCCDs) before their conversion into equity shares.

Which sections of the Income-tax Act were involved?

Section 56(2)(viib)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: WASEEM AHMED & KESHAV DUBEY

PER WASEEM AHMED, ACCOUNTANT MEMBER:

This appeal is filed by the Assessee against the order of Ld. PRINCIPAL CIT(APPEALS) 11 vide DIN: ITBA/AST/S/143(3)/2022-23/1048218265(1) dated 26- Nov-2025 for the Assessment Year 2021-22. 2. The assessee, in the appeal memo, has raised multiple, detailed, interconnected grounds that pertain to a single issue, the addition made

The order continues below.

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