Supreme Court dismisses SLP against Reliance Communications

KOLKATA: In a Rs 4,800-crore reprieve to India’s fourth-largest telco, the Supreme Court Tuesday dismissed a special leave petition (SLP) filed by the Income Tax department to tax the proceeds of Reliance Communications’ $1.5-billion foreign currency convertible bonds () issued nearly a decade ago.

An apex court bench, comprising Justices Kurian Joseph and Rohinton Fali Nariman, "dismissed the IT department’s SLP in relation to taxing RCom’s FCCB proceeds, interest and derivatives income/loss thereon," the Anil Ambani-led company said in an official statement Tuesday.

“The Supreme Court order has quashed (a) contingent tax liability of RCom for about Rs 4800 crore,” the company added.

RCom had issued $1.5 billion (Rs 6,485 crore) of FCCBs in FY2007 in line with Reserve Bank of India’s extant guidelines and applicable laws. Subsequently, the IT Department decided to assess the FCCB proceeds “as unexplained cash credits” and had raised tax demands.

RCom had appealed against the IT Department order, and the I-T Appellate Tribunal and Bombay High Court had upheld its appeal.