Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 104 - ITAT BANGALOREESOP expenses - non deduction of tds on discount given - taxability as perquisite - assessee has vested ESOP rights to certain employees - assessee claimed a sum being the difference between the market price of shares and the issue price as ESOP expenses u/s 37(1) - Whether the TDS is to be deducted during the current year itself or not - HELD THAT:- DRP has understood that there are 4 stages in grant of ESOP i.e. granting of option, vesting of option, exercise of option and selling of shares - there will be time different between “vesting of option” and “exercise of option” and accordingly the period of taxability of ESOP benefits as perquisite may also differ - we are of the view that the tax authorities are not justified in holding that the assessee should have deducted tax at source from the discount amount by assessing the same as perquisite in the hands of the assessee in the year in which ESOP was vested in them. We hold that the assessee is entitled for deduction of ESOP expenses when the rights are vested in the hands of the assessee as held in the case of Biocon Ltd [2013 (8) TMI 629 - ITAT BANGALORE] - we direct the AO to allow the claim - AO is entitled to satisfy himself that the assessee has either deducted tax at source when the option is exercised by the employee or has reversed the expenditure when the concerned employee did not exercise the option, if it is considered necessary by the AO. - Decided in favour of assessee.
|