NCLAT has rejected the Income Tax Department's petition filed against Reliance Jio. The petition sought the cancellation of the approval granted for the separation of Jio's tower and fiber cable business. The Ahmadabad Bench of NCLAT had given approval to Reliance Jio to restructure the business. In this plan of the company, it is proposed to separate Jio Digital Fiber Private Limited and Reliance Jio Infratel Private Limited.
The income tax department is expecting a lot of revenue loss due to this scheme of Reliance. Therefore the Income Tax Department had reached NCLAT against it. The Appellate Tribunal commented on the matter saying that loss of revenue does not mean the scheme is against the rules. NCLAT upheld the NCLT decision, saying it would not interfere in the restructuring of the company. Reliance, while presenting its case in the matter, said that its tower and optic fiber business was earlier established as a separate company. According to the company, its liabilities and assets were completely different from each other.
Significantly, in April, Reliance had talked about the separation of fiber and mobile tower business. During this time, the company had said that two separate infrastructure investment trusts would control the fiber and tower business. The company had said to give shareholding worth Rs 500 crore to the fiber unit and Rs 200 crore to the mobile tower unit. Both these trusts are formed by Reliance Industrial Investment and Holdings Limited and will be wholly owned by Reliance Industries Limited. This restructuring has also received green signal from SEBI.
