INCOME TAX ACT, 1961

Section 37(1)

Business expenditure - Allowability of Employees Stock Option Scheme Compensation - -

AO observed that assessee had charged in the profit and loss account, an amount as Employees Stock Option Scheme Compensation. Assessee submitted that the Employees Stock Option Scheme Compensation was an allowable expenditure. AO did not accept the submissions of assessee and held that Employees Stock Option (ESOP) would not be treated as a revenue expenditure, but it was a capital expenditure, therefore, no actual expenditure was incurred by the company either in the form of capital expenditure or revenue expenditure. Accordingly, AO added the sum to total income of assessee. Held: CIT(A) had relied on various decisions, ESOP was treated as revenue expenditure. Revenue did not bring any contrary decision against the decision in case of Biocon Ltd. (2013) 35 taxmann.com 335 (Bang)(SB) : 2013 TaxPub(DT) 2046 (Bang-Trib) as relied on by assessee. Therefore, CIT(A) had rightly decided the issue in favour of assessee with certain directions to AO.

Relied:Biocon Ltd. ((2013) 35 taxmann.com 335 (Bang)(SB) : 2013 TaxPub(DT) 2046 (Bang-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 14A

SUBSCRIBE FOR FULL CONTENT