In this regard, the Adani Group issued a statement and tax experts have also supported this point.
The Adani Group recently acquired VCPL, a lesser-known firm that had extended over Rs 403 crore in warrants to the founders of NDTV more than a decade ago. VCPL was allowed to acquire 29.18 per cent stake in the newsgroup in case of non-payment of the loan.
Adani has exercised this right of VCPL, but NDTV says such acquisitions have been barred by the Income Tax authorities.
Adani Group said in a statement that Vishwapradhan Commercial Private Limited (VCPL) has informed that the orders of the Income Tax Department are applicable only to the shares of RRRP Holding Private Limited (a promoter of NDTV) in NDTV and will in no way allow VCPL to hold equity shares. The allocation is not restricted.
The group, citing the reply received from VCPL, said that the orders of the Income Tax Department have been issued only against RRPR and this was done to secure the continued ownership of RRPR on the said NDTV shares. Income Tax Department orders have not been issued against Prannoy Roy and Radhika Roy individually.
Tax experts have also backed the Adani group on this issue.
Vishwas Panjiar, Partner, Nangia Andersen LLP said that the position adopted by NDTV seems to be based on erroneous interpretation of the provisions of Section 281 of the Income Tax Act, 1961.
Sharing a similar view, Anita Basrur, Partner, Sudit K Parekh & Co LLP said that Section 281 is applicable when there is a transfer of property or when duty is levied on any property.
He said that in the present case the warrants held by VCPL are being converted into equity shares of RRPRH. It is not a transfer, but new shares are being issued. Therefore, the provisions of section 281 are not violated.
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