Interest on FCCDs is to be computed by applying LIBOR plus 200 points

Fairfield Developments Limited Vs DCIT (ITAT Hyderabad) ITAT Hyderabad held that FCCDs are debt hence interest paid/ payable on FCCDs in to be computed by applying LIBOR plus 200 basis points. Facts- AO issued show cause asking as to why excess interest income of Rs. 13,98,41,656/ – be not taxed at 40% plus surcharge relying on article 11(7) of India – Cyprus DTAA. The assessee contended since the FCCD’s are in the nature of equity instruments and are denominated in INR and interest on the same is payable in INR, the same has to be benchmarked at the currency specific interes...