https://www.taxtmi.com/caselaws?id=786165 Transfer pricing adjustment: tribunal upheld recharacterisation of preference share investment as a loan where assessee failed to bifurcate conversion-linked and fresh subscriptions, and affirmed benchmarking of imputed interest at arm's length. Disallowance under the rule for expenditure related to exempt income was sustained because the assessee's suo motu ad hoc allocations lacked evidentiary basis; however, disallowance of interest under the allocation rule was set aside due to demonstrated availability of interestfree funds. Administrative expenditure disallowance must be recomputed considering only investments that yielded exempt income. Additional ground on cost attribution for captive steam rejected; cost attributed to electricity, denying deduction. Interest claimed for acquisition of control denied for lack of nexus. Several factual issues remitted to AO for fresh examination. en-us Wed, 04 Feb 2026 00:00:00 +0530 Fri, 06 Feb 2026 18:07:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=786165 Transfer pricing adjustment: tribunal upheld recharacterisation of preference share investment as a loan where assessee failed to bifurcate conversion-linked and fresh subscriptions, and affirmed benchmarking of imputed interest at arm's length. Disallowance under the rule for expenditure related to exempt income was sustained because the assessee's suo motu ad hoc allocations lacked evidentiary basis; however, disallowance of interest under the allocation rule was set aside due to demonstrated availability of interestfree funds. Administrative expenditure disallowance must be recomputed considering only investments that yielded exempt income. Additional ground on cost attribution for captive steam rejected; cost attributed to electricity, denying deduction. Interest claimed for acquisition of control denied for lack of nexus. Several factual issues remitted to AO for fresh examination. Case-Laws Income Tax Wed, 04 Feb 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=786165