India Income Tax Appellate Tribunal Holds Interest "Payable" is Not Taxable Interest "Paid" Under Tax Treaty with Cyprus

The Delhi Income Tax Appellate Tribunal (ITAT) issued an order on 2 September 2021 concerning the appeal of a transfer pricing adjustment on deemed interest payable and whether the deemed interest payable is taxable under Article 11 (Interest) of the Cyprus-India tax treaty. The case involved a company incorporated in Cyprus that had subscribed to fully convertible debentures (FCDs) issued by multiple Indian companies. The FCDs were originally subscribed by the Cyprus company in 2007 with a 1…