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2014 (11) TMI 772 - AT - Income TaxESOP expenses disallowed – Held that:- The CIT(A) rightly observed that the ESOP expenses represented the option discount, that is, the excess of the market price of the share on the date of grant of the option under ESOP 2006 over the exercise price of the option – in assessee’s own case for the earlier AY CIT(A) allowed the claim of assessee for ESOP expenses - the decision of the CIT(A) regarding allowing ESOP expenses claimed by the assessee is upheld – Decided against revenue. Preponement of deferred sales tax loan chargeable u/s 41(1) or not – capital receipt or not – Held that:- The AO noticed that the surplus representing remission of principal amount of sales tax loan was not offered for taxation and when queried assessee submitted that the sum of ₹ 34,79,580/- being remission of principal amount of loan is a capital receipt and is therefore not chargeable to tax under the Income-tax Act, 1961 - the company availed of the benefit offered SICOM scheme and decided to pay the discounted value of deferred liability which resulted in capital receipt - The AO held that the discounted surplus of sales tax loan represents sales tax subsidy and was taxable as revenue receipt chargeable to tax u/s 41(1) because assessee's liability to pay had been extinguished - CIT(A) rightly followed the order of the Tribunal and allowed the ground of assessee in regard to treating the deferred sales tax liability as capital receipt – thus, the AO is directed to treat the deferred sales tax liability as capital receipt – Decided against revenue.
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