The NCLAT has dismissed petitions filed by the Income Tax Department, against the approval for Reliance Jio Infocomm’s scheme to hive off its fibre and tower businesses into two separate units.
The Ahmedabad-bench of the National Company Law Tribunal had earlier this year granted permission for the demerger. The I-T department challenged it before the National Company Law Appellate Tribunal, claiming that by this arrangement, Reliance Jio Infocomm had sought to convert redeemable preference shares into loans, which would cause a revenue loss to the Department. The NCLAT dismissed it, saying the NCLT had already dealt with the issue. “The mere fact that a scheme may result in reduction of tax liability does not furnish a basis for challenging,” its validity.
