https://www.taxtmi.com/caselaws?id=800384 Compulsorily convertible debentures retain their debt character until actual conversion into shares, despite their hybrid nature and absence of ordinary principal repayment. Transfer-pricing analysis must determine the arm's length price of the international transaction actually undertaken and cannot recast such debentures as equity solely because conversion is compulsory. Debt-equity recharacterisation is separately available where an arrangement is declared an impermissible avoidance arrangement under the prescribed Chapter X-A safeguards and procedure, which were not invoked. Recharacterising the debentures as equity, determining interest at nil, and making the resulting transfer-pricing adjustment were therefore impermissible; the adjustment was deleted. en-us Thu, 10 Sep 2026 00:00:00 +0530 Tue, 06 Oct 2026 08:13:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=800384 Compulsorily convertible debentures retain their debt character until actual conversion into shares, despite their hybrid nature and absence of ordinary principal repayment. Transfer-pricing analysis must determine the arm's length price of the international transaction actually undertaken and cannot recast such debentures as equity solely because conversion is compulsory. Debt-equity recharacterisation is separately available where an arrangement is declared an impermissible avoidance arrangement under the prescribed Chapter X-A safeguards and procedure, which were not invoked. Recharacterising the debentures as equity, determining interest at nil, and making the resulting transfer-pricing adjustment were therefore impermissible; the adjustment was deleted. Case-Laws Income Tax Thu, 10 Sep 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=800384