| |
| The Tax Publishers2019 TaxPub(DT) 8461 (Mum-Trib) INCOME TAX ACT, 1961
Section 37(1)
Where ESOP expenditure debited to profit and loss account represents the difference between the fair market value and the issue price of the stocks and it was also evident that assessee had provided for such cost in terms with SEBI guidelines, therefore, expenses claimed by assessee was allowed.
|
Business expenditure - Allowability - Employee Stock Option Plan (ESOP) expense/cost -
In the course of assessment proceedings, AO noticed that assessee had debited ESOP expenses to the profit and loss account and called upon assessee to justify the claim. AO however did not accept the claim of assessee. He observed that assessee had amortized the ESOP cost in contravention to SEBI guidelines. Accordingly, he disallowed ESOP expenses debited to profit and loss account. Held: ESOP expenditure debited to profit and loss account represents the difference between the fair market value and issue price of stocks. It was also evident that assessee had provided for such cost in terms with SEBI guidelines. High Court in the case of PVP Ventures [(in TC(A) No. 1023 of 2005 vide Order dated 19-6-2012) : 2014 TaxPub(DT) 1924 (Mad-HC)] had allowed similar expenditure claimed by assessee. Therefore, expenses claimed by assessee was allowed.
REFERRED : CIT-III v. PVP Ventures Limited (in TC(A) No. 1023 of 2005 vide Order dated 19-6-2012) : 2014 TaxPub(DT) 1924 (Mad-HC), Biocon Ltd. & Ors. v. DCIT & Ors. ITA No. 248/Bang/2010 vide Order dated 16-7-2013 : 2013 TaxPub(DT) 2046 (Bang-Trib), M/s. Sterling Holiday Resorts (India) Ltd. v. ACIT [I.T.A. Nos. 471, 472, 473 and 160/Mds/2012, dt. 30-8-2012], M/s VIP Industries Ltd. v. DCIT (2010-TIOL-654- ITAT-Mum) : 2009 TaxPub(DT) 1570 (Mum-Trib)
FAVOUR : In assessee's favour
A.Y. : 2011-12, 2013-14 & 2012-13
IN THE ITAT, MUMBAI BENCH
 SUBSCRIBE FOR FULL CONTENT
|