--- title: "OYO Hotels and Homes vs DCIT, Income Tax Appellate Tribunal, ITA No. 5718/DEL./2025, 7237/DEL./2025, Delhi 04 June, 2026" date: 2026-06-30 author: "Akriti Sharma" url: https://ksandk.com/newsletter/section-562viib-ccps/ --- # OYO Hotels and Homes vs DCIT, Income Tax Appellate Tribunal, ITA No. 5718/DEL./2025, 7237/DEL./2025, Delhi 04 June, 2026 Posted On - 30 June, 2026 • By - Akriti Sharma The Delhi ITAT held that issuance of Compulsorily Convertible Preference Shares (CCPS) by the assessee to its holding company and existing shareholders pursuant to an NCLT-approved reorganisation could not be taxed under Section 56(2)(viib), observing that the provision is aimed at curbing introduction of unaccounted money and was inapplicable where investments were made by a foreign-owned parent company through duly compliant FEMA routes and based on valuations certified by registered valuers. The Tribunal reiterated that tax authorities cannot substitute or rework a valuation carried out under Rule 11UA by qualified experts. It also deleted the addition relating to conversion of CCPS into equity shares, holding that Section 56(2)(viib) had no application to such conversion. On the Revenue’s appeal, the Tribunal upheld deletion of disallowance relating to payments made to Mypreferred Transformation & Hospitality Pvt. Ltd. (MTH), holding that the payments were revenue expenditure for transformation and advisory services and not capital expenditure or interest, as no capital asset or enduring benefit accrued to the assessee. However, the issue relating to reversal of management fee income was remanded to the Assessing Officer for fresh verification due to lack of supporting documentation. Overall, the Tribunal granted substantial relief to the assessee by deleting the massive Section 56(2)(viib) additions and affirming that genuine capital infusion through a corporate reorganisation cannot be treated as a vehicle for introducing unaccounted funds. *Last Updated on 30 June, 2026* --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)