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| The Tax Publishers2022 TaxPub(DT) 0835 (Karn-HC) INCOME TAX ACT, 1961
Section 37(1)
Following the decision of jurisdiction High Court in assessee's own case CIT v. Biocon Ltd. (2020) 121 Taxman 351 (Kar.) : (2021) 276 Taxman 1 (Kar.) : (2021) 430 ITR 151 (Kar.) : 2020 TaxPub(DT) 4924 (Karn-HC), discount on ESOPs was rightly debited as expenditure in books of account by assessee and AO was directed to allow the deduction of expenses.
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Business expenditure - Disallowance of discount on issue of ESOP - Capital or revenue expenditure -
Issue arose for consideration as to whether Tribunal was right in holding that discount on issue of ESOP was allowable deduction in computing the income under the head profits and gains of the business. Held: As decided by jurisdictional High Court in assessee's own case in CIT v. Biocon Ltd. (2020) 121 Taxman 351 (Kar.) : (2021) 276 Taxman 1 (Kar.) : (2021) 430 ITR 151 (Kar.) : 2020 TaxPub(DT) 4924 (Karn-HC) wherein it was held that discount on issuance of ESOPs was not a contingent liability but an ascertained liability and following the mercantile system of accounting, discount on ESOPs was rightly debited as expenditure in books of account, therefore, following the same, AO was directed to allow the deduction of expenses.
Followed:CIT v. Biocon Ltd. (2020) 121 Taxman 351 (Kar.) : (2021) 276 Taxman 1 (Kar.) : (2021) 430 ITR 151 (Kar.) : 2020 TaxPub(DT) 4924 (Karn-HC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2003-04
IN THE KARNATAKA HIGH COURT
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