Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (12) TMI 515 - ITAT HYDERABADAdmission of additional ground - Non-compliance of DRP directions – Transfer pricing adjustment made in excess of global profits – Held that:- The assessee had raised an objection before the DRP, and the DRP had given a direction to the Assessing Officer that the TP adjustments should not exceed the global profits of the assessee company - the AO has not given effect to this finding of the DRP while passing the assessment order and therefore, this ground is very much admissible and has to be considered on merits. Therefore, we admit the additional ground of appeal. Sub-section (10) of S.144C provides that every direction issued by the DRP shall be binding on the AO – the AO ought to have given effect to the directions of the DRP - the issue needs to be remitted to the file of the AO to re-compute the Transfer Pricing Adjustment, duly complying with the directions of the DRP that the TP adjustments shall not exceed the global profits earned by the assessee company – the matter is to be remitted back to the AO after giving reasonable opportunity of hearing to the assessee – Decided in favour of assessee. ESOPs to the employees – Held that:- M/s. Biocon Limited and others Versus The Dy. Commissioner of Income-tax (LTU) and others [2013 (8) TMI 629 - ITAT BANGALORE] - the discount under ESOP is in the nature of employees cost and is hence deductible during the vesting period w.r.t. the market price of shares at the time of grant of options to the employees - The amount of discount claimed as deduction during the vesting period is required to be reversed in relation to the unvesting/lapsing options at the appropriate time - an adjustment to the income is called for at the time of exercise of option by the amount of difference in the amount of discount calculated with reference the market price at the time of grant of option and the market price at the time of exercise of option - No accounting principle can be determinative in the matter of computation of total income under the Act - discount on issue of Employee Stock Options is allowable as deduction in computing the income under the head 'Profits and gains of business or profession' – thus, the matter is to be remitted back to the AO – Decided in favour of assessee.
|