Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 803 - AT - Income TaxEmployees’ stock option scheme benefit taxability - AO observed that expenditure is directly related to the expansion of the capital base of the company and that therefore, the expenditure incurred on issuing shares to increase the capital by the company would not be allowable as revenue expenditure. - Held that:- The Special Bench in Biocon Limited [2013 (8) TMI 629 - ITAT BANGALORE] has held that the discount on premium under one of the modes, compensating employees for their services is a part of their remuneration and as such, this discount cannot be held to be either a short capital receipt, or a capital expenditure. No decision to the contrary has been placed before us. Besides, the other decisions cited by the assessee are also on similar lines. Therefore, following “Biocon Limited” (supra) and the other case laws cited by the assessee, Ground No.5 is accepted and it is held that the employees’ stock option scheme benefit in question is taxable in the hands of the assessee’s employees as perquisite under section 43(2) of the Act. The payment having been established as salary/employee cost, the same is revenue in nature. This expenditure claimed by the assessee is to be treated as a business expenditure of the assessee - Decided in favour of assessee Set off of loss pertaining to certain STP units, against the taxable business income of the assessee disallowed - Held that:- In “Capgenimi India (P) Limited”, (2011 (5) TMI 509 - ITAT, MUMBAI), a co-ordinate Bench of this Tribunal, through one of us, i.e. the ld. AM, has held that in case of loss of units, eligible for deduction u/s 10A, section 10A is a deduction provision and not an exemption provision after its amendment with effect from the assessment year 2001-02 and that, therefore, the loss from the section 10A unit has to be adjusted against the taxable profits of other units after deduction u/s 10A has been allowed in respect of each eligible unit. The other case laws relied on by the assessee also hold that set off of loss of the eligible unit is allowable against the other taxable income.- Decided in favour of assessee
|