https://www.taxtmi.com/caselaws?id=765096 The ITAT Chennai upheld the CIT's revision u/s 263 against an assessee who failed to offer accumulated interest income on debentures converted to equity shares. The assessee argued cash system accounting and claimed taxation would occur upon share sale, but the tribunal rejected this, holding that interest income was deemed received upon conversion. The tribunal found the interest component must be taxed in the conversion year, dismissing double taxation concerns as the cost basis for future capital gains would include both debenture face value and accumulated interest components under Sec. 49(2A). The AO's acceptance of the return was deemed erroneous and prejudicial to revenue interests. en-us Tue, 05 Nov 2024 00:00:00 +0530 Sat, 25 Jan 2025 08:26:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=765096 The ITAT Chennai upheld the CIT's revision u/s 263 against an assessee who failed to offer accumulated interest income on debentures converted to equity shares. The assessee argued cash system accounting and claimed taxation would occur upon share sale, but the tribunal rejected this, holding that interest income was deemed received upon conversion. The tribunal found the interest component must be taxed in the conversion year, dismissing double taxation concerns as the cost basis for future capital gains would include both debenture face value and accumulated interest components under Sec. 49(2A). The AO's acceptance of the return was deemed erroneous and prejudicial to revenue interests. Case-Laws Income Tax Tue, 05 Nov 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=765096