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TMI Blog2022 (9) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... oncessional rate of 5% as mentioned in section 194LD was not available thereon - HELD THAT:- We find that the issue is covered in favour of the assessee in the case of DIT Vs. Shree Visheshwar Nath Memorial Public Ch. Trust [ 2010 (8) TMI 435 - DELHI HIGH COURT ] When ld. DR for the Revenue was asked whose exposition on the meaning of word debenture should prevail. She fairly agreed that it is Hon ble jurisdictional High Court order which is to be followed. Accordingly, respectfully following the precedent, we set aside the orders of the Revenue authorities and decide the issue in favour of the assessee. - ITA No. 531/Del./2022 - - - Dated:- 26-9-2022 - SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER And SHRI KUL BHARAT , JUDICIAL MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. 3.2. The Ld. AO/ Hon'ble DRP has erred in law and on facts of the case by rejecting the claim of the Appellant for taxing the interest income from non-convertible debentures at 5 percent as per Section 194LD of the Act and thereby proposing to apply India-Germany Double Tax Avoidance Agreement and taxing the same at 10 percent. 3.3. The Ld. AO/ Hon'ble DRP has erred in law and on facts of the case by considering the rupee denominated bonds ( RDBs ) as masala bonds issued by Zuari Cement Limited ( ZCL ) in the nature of non-convertible debentures and thereby taxing the interest income in the similar manner at 10 percent as per India-Germany Double Tax Avoidance Agreement, instead of 5 percent as per Section 194LD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of bonds in the Act, the term 'bonds' used in section 194LD should be considered as including NCDs and accordingly the concessional rate of 5% should be allowed provided other conditions mentioned in section 194LD of the Act are satisfied. However, DRP was not convinced and confirmed the AO s order. 5. Against this order, assessee is in appeal before us. We have heard both the parties and perused the record. We note that the solitary issue before us is whether debenture should be considered as Bond in absence of any definition of this term in Income-tax Act. 6. Having heard both the counsels and perused the record, we find that the issue is covered in favour of the assessee by Hon ble jurisdictional High Court decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those forms and modes of investments, as are prescribed under sub-section (5) of section II, would be entitled to exemption for the purposes of section II and the investment in other forms of bonds, by necessary implication of inference, had to be excluded from the exemption list. Sub-section (5) of section II deals with the investment in bonds of a financial corporation, the State Government or the Central Government. No doubt, specific provision is made in respect of investment in these particular kinds of bonds; however, that would not mean that while dealing with the investment in 'debenture', which also qualifies for exemption, restrictive meaning would be given to the term 'debenture', more particularly when this term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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