https://www.taxtmi.com/highlights?id=104579 Compulsorily convertible debentures remain debt until conversion, notwithstanding mandatory conversion, absence of principal repayment, regulatory classification or accounting treatment. Their interest must therefore be benchmarked as debt for arm's-length pricing; treating pre-conversion CCDs as equity and fixing interest at nil is unsustainable. Debt-equity recharacterisation is contemplated under Chapter X-A only where an arrangement is declared impermissible and the prescribed procedure is followed. As that procedure was not invoked, the transfer-pricing adjustment based on recharacterisation of unsecured CCDs as equity was deleted. en-us Tue, 06 Oct 2026 08:13:52 +0530 Tue, 06 Oct 2026 08:13:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=104579 Compulsorily convertible debentures remain debt until conversion, notwithstanding mandatory conversion, absence of principal repayment, regulatory classification or accounting treatment. Their interest must therefore be benchmarked as debt for arm's-length pricing; treating pre-conversion CCDs as equity and fixing interest at nil is unsustainable. Debt-equity recharacterisation is contemplated under Chapter X-A only where an arrangement is declared impermissible and the prescribed procedure is followed. As that procedure was not invoked, the transfer-pricing adjustment based on recharacterisation of unsecured CCDs as equity was deleted. Highlights Income Tax Tue, 06 Oct 2026 08:13:52 +0530 https://www.taxtmi.com/highlights?id=104579