FCCDs are debt till it is converted into equity- ITAT allows Benchmarking by applying LIBOR plus 200 points

Watermarke Residency Limited Vs DCIT (ITAT Hyderabad)

In the present case, the TPO had benchmarked the transaction after treating the FCCDs as debt. This finding of TPO was based on Terms of issuance of FCCD and balance-sheets/ financials of the assessee as well as of it’s A.E, where both had mentioned FCCD as debt. We agree with the finding of lower authority that FCCD is a debt, as holder had a right to recover the debt and had a right to receive the interest on the debt from the payee. Further assessee during the hearin

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