KAIROS PROPERTIES PVT LTD,MUMBAI vs. DCIT WD 15(1)(2), MUMBAI

ITA 6760/MUM/2024Status: DisposedITAT Mumbai09 September 2026AY 2021-229 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that CCDs retain their character as debt until actual conversion into equity and cannot be re-characterized as equity from inception for transfer pricing purposes. The Tribunal also found the assessee's effective interest rate to be within the arm's length range based on domestic lending benchmarks.

What were the facts?

The assessee company issued Compulsorily Convertible Debentures (CCDs) to its Associated Enterprise and paid interest thereon. The Assessing Officer (AO) and Dispute Resolution Panel (DRP) treated the CCDs as equity and determined the arm's length interest rate at Nil, leading to a disallowance.

What were the issues?

Whether Compulsorily Convertible Debentures can be re-characterized as equity for transfer pricing purposes, and what is the appropriate benchmark for interest on INR-denominated debt issued to a foreign AE.

Which sections of the Income-tax Act were involved?

Section 92A,Section 94B,Section 143(3),Section 144B,Section 144C(5),Section 144C(13)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI ANIKESH BANERJEE & MS. RATNA DASGUPTA

For Respondent: Shri Ajay Uke; Sr. DR

PER: SHRI ANIKESH BANERJEE, (JM): The assessee has filed the appeal against the order of the Assessment Unit, Income-tax Department [in short, “Ld. AO”] under section 143(3) r.w.s 144C(13) r.w.s 144B of the Income-tax Act, 1961 ( in short “the Act”) dated 25.10.2024 passed by pursuant to the directions dated 29.09.2024,

ITA 6760/MUM/2024

issued by the Ld. Commissioner of Income Tax (DRP-1) Mumbai-2 (in short “Ld. DRP”) passed under section 144C(5) of the

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 92A

All 117 judgments and leading authorities on Section 92A →

Recent GST High Court judgments

Search GST case law →