DEEPAK GUPTA,J. - (1.) The appellant New Delhi Television Limited (hereinafter referred to as 'the assessee') is an Indian company engaged in running television channels of various kinds. It has various foreign subsidiaries to which we shall refer in detail later on but we are concerned mainly with the subsidiary based in the United Kingdom (UK) named NDTV Network Plc., U.K. (hereinafter referred to as 'NNPLC').
(2.) The assessee submitted a return for the financial year 2007-08 i.e. assessment year 2008-09 on 29.09.2008 declaring a loss. This return was processed under Section 143 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The case was selected for scrutiny and notice under Section 143(2) of the Act was issued and a notice under Section 142(1) of the Act was also sent to the assessee. Thereafter, the case of the assessee was taken up for consideration and final assessment order was passed on 03.08.2012.
(3.) We are mainly concerned with that part of the assessment order which relates to the issue of step-up coupon bonds amounting to US$100 million. These bonds were issued in July, 2007 through the Bank of New York for a period of 5 years. The case of the assesee is that NNPLC issued step-up coupon bonds of US$ 100 million which were arranged by Jeffries International and the funds were received by NNPLC through Bank of New York. The assessee had agreed to furnish corporate guarantee for this transaction. These bonds were subscribed to by various entities to whom we shall refer to in detail at a later stage. These bonds were to be redeemed at a premium of 7.5% after the expiry of the period of 5 years. However, these bonds were redeemed in advance at a discounted price of US $74.2 million in November, 2009.;