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2014 (4) TMI 109 - AT - Income TaxDisallowance of interest - interest expenditure claimed u/s. 37(1) – Interest free loan given to Murugappa Employees Foundation - borrowings have been made by the assessee for advancing the amount to the Trust formed by the assessee for acquiring shares of the group companies to be allotted under ESOP Scheme - Held that:- The benefits accruing to employees by allotment of shares under the scheme is in the form of perquisite. The difference between the market value at which the shares are acquired by the Trust and the value at which the employees were allotted shares is assessable as perquisite in the hands of the employees. CIT(A) has rightly pointed out that, when company provides benefit or amenity to its employees through intermediary institution, it is not necessary to that such intermediary institute should operate solely for the similar company - What is important is that value of benefit has been conferred to employees irrespective of manner in which or through whom they obtain the benefit as long as source of benefit is employer of benefit get taxed in hands of employees - CIT(Appeals) remitted file back to Assessing Officer with direction to proportionately disallow expenditure if shares have been allotted to employees of other group companies - However, disallowance so made shall be allowed in hands of respective group companies - Do not find any infirmity in impugned order of CIT(Appeals) - Findings of CIT(Appeals) confirmed - Decided against Revenue.
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