Recently NCLAT approved the scheme of arrangement of Reliance Jio Infocomm Limited (Jio Infocomm) and ‘Jio Digital Fibre Private Limited’ (Jio Fibre) and ‘Reliance Jio Infratel Private Limited’ (Jio Infratel) and their respective shareholders and Creditors. Scheme was previously approved by the NCLT which was challenged in the upper court “NCLAT’ by Income Tax dept, objections of tax department were eventually rejected by the NCLAT.
There were three different arrangements entered through the scheme, are as follows:
- Demerger of Optic fibre undertaking of Jio Infocom into Jio Fibre
- Slump Exchange of Tower infrastructure undertaking of Jio Infocom to Jio Infratel
- Arrangement with the shareholders of Demerged Company i.e. Reliance Jio Infocom for conversion of Preference share including premium (aggregating to Rs. 65,000 crores) into loan.
The Department raised objections in relation to the third arrangement envisaged through the scheme.
Major concern/Question raised by IT Department:
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