https://www.taxtmi.com/caselaws?id=798833 Compulsorily convertible debentures retain their debt character until conversion into shares, even where they are hybrid instruments, compulsorily convertible, and lack ordinary principal repayment. Transfer-pricing analysis cannot substitute equity for debt solely on those features where the governing terms remain unchanged. Recharacterisation as equity requires invocation of the General Anti-Avoidance Rule framework, including a declaration of an impermissible arrangement and compliance with prescribed safeguards and procedure. In the absence of such action, pricing interest at nil by treating the debentures as equity is unsustainable, requiring deletion of the transfer-pricing adjustment. en-us Wed, 09 Sep 2026 00:00:00 +0530 Sat, 12 Sep 2026 08:41:34 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=798833 Compulsorily convertible debentures retain their debt character until conversion into shares, even where they are hybrid instruments, compulsorily convertible, and lack ordinary principal repayment. Transfer-pricing analysis cannot substitute equity for debt solely on those features where the governing terms remain unchanged. Recharacterisation as equity requires invocation of the General Anti-Avoidance Rule framework, including a declaration of an impermissible arrangement and compliance with prescribed safeguards and procedure. In the absence of such action, pricing interest at nil by treating the debentures as equity is unsustainable, requiring deletion of the transfer-pricing adjustment. Case-Laws Income Tax Wed, 09 Sep 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=798833