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2021 (10) TMI 1010 - AT - Income TaxDisallowance of Employee Stock Option Scheme Compensation - Addition on the ground expenditure was on account of issuance of share capital, which being in the nature of capital expenditure, was not allowed as business expenditure - CIT-A allowed the deduction - HELD THAT:- We find that learned CIT(A) has allowed the appeal of the assessee following the decision of the Special Bench of Tribunal in the case of Biocon Ltd.[2013 (8) TMI 629 - ITAT BANGALORE]and other decision of jurisdictional High Court. We do not find any infirmity in the order of the Learned CIT(A) in following binding precedents, and allowing employee stock option compensation as revenue expenditure. The ground of the appeal of the Revenue is, accordingly, dismissed. Disallowance u/ 14A r.w. Rule 8D - assessee claimed exempted income which included dividend income and profit on redemption of investment - assessee made suo motu disallowance for earning the above exempted income - CIT(A) has deleted the disallowance mainly on the ground that investment from growth fund is taxable, and therefore, said investment should be excluded while working out the disallowance under Rule 8D(2)(iii) of the Rules. Also directed not to consider investment in subsidiary, which according to the Ld. CIT(A), was for controlling stake - HELD THAT:- As in view of the recent decision of the Hon’ble Supreme Court in the case of Maxxop Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] strategic investment for obtaining controlling stake has also been found liable for computing disallowance under Rule 8D(2)(iii) of the Rules and therefore to this extent, the order of the Ld. CIT(A) is set aside and matter restored back to the learned Assessing Office for re-computing the disallowance under Rule 8D(2)(iii) of the Rules. The Assessing Officer is also directed to verify whether income from growth funds has been included under taxable income and if so, then he shall exclude the said investment for computing disallowance in terms of Rule 8d(2)(iii) of Rules. The ground of the appeal of the Revenue is accordingly allowed partly for the statistical purposes.
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