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2012 (9) TMI 764 - AT - Income TaxInterest paid on optionally convertible debenture - CIT(A) deleted the disallowance - Held that:- There was no contingency involved in the accrual of liability with reference to the interest on the debentures. CIT (A) has rightly observed that debentures, whether fully or partly or optionally convertible, are nothing but debt till the date of conversion and any interest paid on these debentures is allowable as normal business expenditure. The only uncertainty in the optionally convertible debentures issued by the assessee is whether the debenture holder will go for conversion into shares or will continue to hold them as debentures. CIT (A) has rightly held that this uncertainty in no way impacts the assessee company's liability to pay interest till the date of conversion - in favour of assessee.
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