The assessee, TBHPL, had invested  in shares of Group Company named TGSPL. Under the scheme duly approved by High Court, TGSPL carried out reduction of capital. Hence, the assessee had written off its investment in its Profit and Loss account as exception item. Subsequent to reduction of capital, TGSPL issued shares to Serco Netherlands and Serco International on conversion of FCDs held by them.  The AO held that reduction in share capital by TGSPL of the shares allotted to the assessee, has resulted in benefit to another group company Serco International SARL and made addition  u/s. 60 r.w.s. 63 of the Act by taking into account FMV of shares of TGSPL. The CITA(A) confirmed the addition. On further appeal, the addition was deleted by the Tribunal holding that there is no generation of income in the transaction of reduction in share capital and conversion of FCDs into shares. (AY. 2016-17)