https://www.taxtmi.com/caselaws?id=800661 Compulsorily convertible debentures retain their pre-conversion contractual coupon obligation despite a future conversion requirement, particularly where holders lack equity rights before conversion and the conversion price is determined later at fair market value. Under the arm's-length principle, a nil price for CCD interest requires comparable-based analysis under the prescribed transfer-pricing method; long tenure, mandatory conversion, or no cash redemption may justify comparability adjustments but do not alone permit recharacterisation. Recharacterisation requires evidence that legal form and economic substance diverge or that the arrangement cannot be reliably priced. Interest deductibility or capitalisation depends on fund utilisation and supporting records, not merely on characterising unconverted CCDs as equity. en-us Thu, 01 Oct 2026 00:00:00 +0530 Fri, 09 Oct 2026 08:30:53 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=800661 Compulsorily convertible debentures retain their pre-conversion contractual coupon obligation despite a future conversion requirement, particularly where holders lack equity rights before conversion and the conversion price is determined later at fair market value. Under the arm's-length principle, a nil price for CCD interest requires comparable-based analysis under the prescribed transfer-pricing method; long tenure, mandatory conversion, or no cash redemption may justify comparability adjustments but do not alone permit recharacterisation. Recharacterisation requires evidence that legal form and economic substance diverge or that the arrangement cannot be reliably priced. Interest deductibility or capitalisation depends on fund utilisation and supporting records, not merely on characterising unconverted CCDs as equity. Case-Laws Income Tax Thu, 01 Oct 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=800661