https://www.taxtmi.com/caselaws?id=460043 ITAT Mumbai ruled in favor of the assessee on multiple transfer pricing adjustments. The tribunal held that compulsory convertible debentures (CCDs) cannot be equated with call options, rejecting the alleged option premium adjustment of Rs. 33,88,000. The court found no income element in CCD issuance as it constitutes a capital transaction. Additionally, section 56(2)(x) was deemed inapplicable to business undertaking purchases between unrelated parties. Interest on CCDs paid to associated enterprise was allowed as CCDs qualify as debt instruments until conversion, with the transaction properly guided by subscription agreements and RBI approval. en-us Tue, 29 Oct 2024 00:00:00 +0530 Wed, 08 Jan 2025 15:19:25 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=460043 ITAT Mumbai ruled in favor of the assessee on multiple transfer pricing adjustments. The tribunal held that compulsory convertible debentures (CCDs) cannot be equated with call options, rejecting the alleged option premium adjustment of Rs. 33,88,000. The court found no income element in CCD issuance as it constitutes a capital transaction. Additionally, section 56(2)(x) was deemed inapplicable to business undertaking purchases between unrelated parties. Interest on CCDs paid to associated enterprise was allowed as CCDs qualify as debt instruments until conversion, with the transaction properly guided by subscription agreements and RBI approval. Case-Laws Income Tax Tue, 29 Oct 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=460043