Treatment of Zero coupon Optionally Optionally fullyconvertible debenture (ZOFCD) under Ind-AS transition under MAT Section 115JB(2C) 1/5th spread over 

Fact:

PCIT reopened the assessee's case under section 263 alleging that the Zero coupon optionally convertible debentures triggered the transitional provision under section 115JB(2C) and since the AO did not consider the impact of the same, the order was prejudicial to the interests of revenue. On appeal

Held on facts that the ZOFCD did not have any financial liability component thus invocation of section 115JB(2C) was unwarranted.

Ed. Note: The decision elaborately discusses many points on IFRS valuation of financial instruments.

Case: Reliance Industrial Investment & Holdings Ltd. v. DCIT 2023 TaxPub(DT) 2139 (Mum-Trib)